Industry pushes ahead with electrics in China

NEW SUV: The Citroen C5 Aircross concept car is presented ahead of the Shanghai Motor Show in Shanghai
Picture: AFP

China’s motor industry is charging ahead with aggressive plans to electrify cars, even as policymakers scale back subsidies aimed at building sales from relatively low levels and consider putting the brakes on sales quotas for plug-in cars.

Industry executives will use the Shanghai Motor Show, which opens to the public on Friday, to show off numerous battery electric and plug-in hybrid models.

But behind the scenes, many are worried that batteries capable of delivering the same driving range as petrol cars are still too expensive.

While green energy car sales have risen dramatically on the back of government policies, making China the world’s leading market in this segment, electric cars have otherwise generated little consumer interest.

They make up less than 2% of China’s overall car market of 28 million vehicles sold last year.

The dominant players in China’s electric vehicle market are local, including state-owned Beijing Automotive Group and Warren Buffett-backed BYD. Most cars have limited range.

Beijing’s central government has floated proposals to require carmakers to substantially boost sales of so-called new energy vehicles, or risk being penalised.

But at the same time, it is cutting subsidies on green cars by a fifth this year, which could deepen manufacturers’ losses. – Reuters

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