China’s new energy vehicle (NEV) market will take off over the next three years, predicted several panelists at a roundtable dialogue held in Beijing on December 11.
The roundtable, organized by d1ev.com, a Chinese Internet portal focused on NEVs, was held at Tesla Motors’ first China showroom. The dialogue centered on automakers’ future strategies in anticipation of NEV commercialization in China. Representatives from three OEMs, a venture capital firm and an infrastructure provider, joined the discussions.
500,000 NEVs by 2015 still possible
“China will sell no less than 500,000 NEVs cumulatively by 2015, if the so-called micro EVs or low-speed EVs are counted,” said Alex Pan, managing director of GSR Ventures, a venture capital firm that invests primarily in China’s IT and greentech sectors.
That number is exactly the target set by the country’s Energy-Saving and New Energy Vehicle Industry Development Plan (2012-2020) published in 2012. The Plan, however, does not count micro EVs officially as NEVs.
Pan believes that 2013 will be the turning point for China’s NEV market and 2016 will be the tipping point, with the three years in between serving as crucial for players in the industry because the market will experience rapid development.
According to Pan, China’s EV battery pack market was less than $500 million over the last eight years combined, but will increase 10-fold over the next three years to $5 billion and increase further by seven-fold to $35 billion by 2020.
GSR Ventures has invested in greentech companies including U.S.-based Boston Power, which currently produces power battery cells with the highest energy density in the world and is undergoing tests in China. The venture capital firm also recently became the largest creditor of luxury EV maker Fisker Automotive, which recently filed for bankruptcy.
Zuo Yan’an, former chairman and Party secretary of Jianghuai Automobile Group Corp. (JAC) and currently executive vice president of Anhui Federation of Industrial Economics, was even more optimistic than Pan, saying that “the volume could exceed half a million units if NEVs that appeal to consumers and are priced right were to hit the market.”
The confidence from Pan and Zuo seems to come from the fact that several policies were launched recently to drive the market, including the Notice on Continuing the Promotion and Application of New Energy Vehicles released on September 17 and the announcement on November 26 of the first batch of 28 cities and regions selected for NEV promotion involving an application for a total of 290,000 NEVs. The second batch is expected to be announced in a few weeks, involving applications of some additional 200,000 NEVs.
“China’s NEV production and sales over the next two years (by the end of 2015) could reach a volume of 200,000-300,000 units, more than those in the last three to five years combined,” predicted Pang Yicheng, CEO of d1ev.com.
Zhang Liping, chairman of Yogomo Vehicle Industry Corp., a micro-EV manufacturer based in Xingtai, Hebei Province, said his company wants to sell 200,000 micro-EVs in 2016.
“China will become the largest EV market in the world and we must offer products that meet the actual demand of our customers,” said Zhang.
Yogomo produced and sold 35,000 micro-EVs in the first 11 months of 2013, according to Zhang, and currently owns production capacities of 300,000 electric motors and controllers and 150,000 micro-EVs. It recently acquired two bus makers and expects to receive license next May to officially begin production of new energy passenger vehicles and buses.
Despite the positive prospects, Zuo did warn that it will be a mistake for manufacturers to rely on policies rather than the market. “It is a matter of whether you have a good product and right positioning. Infrastructure can be perfected once these good products are put into operation,” said Zuo.
ABB, a leader in power and automation technologies, will build its third EV charging infrastructure equipment production base worldwide, according to Peng Wenke, business development manager of EV infrastructure at ABB China.
Model S to officially hit Chinese market in H1 2014
Tesla Motors, which began taking orders for its Model S luxury EV in the Chinese market at the end of August and opened its first China showroom in Beijing in early December on a trial basis, expects the model to officially hit the Chinese market once it completes the regulatory procedures and local NEV subsidy scheme is finalized, according to Kingston Chang, general manager in charge of China.
“We expect to announce details such as retail pricing in the first half of 2014. By then the Chinese consumers will be able to see Model S on the streets of Beijing, how it is charged and registered and whether there would be any subsidies toward its purchase,” said Chang.
The Model S is expected to retail at around ¥1 million ($163,934) in China after import duties and taxes, based on its U.S. retail pricing of between $70,000 and $110,000. From NEV policies and subsidies schemes unveiled so far in China, it is unlikely to receive any government subsidy or preferential treatment in vehicle registration.
Chang did say that Tesla has received quite a few orders from Chinese customers already, especially those from the IT sector. “The car is good to go as is and you can charge it from regular wall or floor sockets. One complete charge will get you 500 km of range so you are covered,” Chang told CBU/CAR. Tesla also has plans to install its Superchargers in China as it does in the U.S., according to Chang.
Tesla is still in the process of resolving a trademark issue with a Chinese man who registered the Tesla name and logo trademarks in China, which Chang said is being resolved by its legal department. Chang also denied recent rumors that it may cooperate with JAC on future joint EV production.