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Fu Yuwu: unwise to treat China market with one standard

As the 25th World Electric Vehicle Symposium and Exposition (EVS25) is coming, our reporter, Linda Luo, interviewed Fu Yuwu, executive vice president of the Society of Automotive Engineers of China, on October 25. Fu talked about the conference progress and the Chinese government’s supportive policies on green vehicles. The following are highlights of the interview. – Editor

 

CBU/CAR: The EVS25 will open in Shenzhen on November 5. Could you give us some background on the event?

Fu Yuwu (Fu): The subject of the EVS25 is “Sustainable Mobility Revolution.” We aim to make it a milestone meeting in the history of the electric vehicle industry. The exhibition size and number of participants are unprecedented. Major Chinese OEMs, including FAW, Dongfeng, SAIC, Chang’an, Chery and Geely, will attend the exhibition, and multinational automakers such as Volkswagen, GM, Toyota and Nissan will display their newest EV products at the show. Domestic and multinational powertrain and battery suppliers will also attend.

The conference is also on a more wide reaching level than ever before. So far, we’ve received over 1,000 papers which have received good reviews. The number of conference attendees could hit 2,000. In fact, we dare to claim that the EVS25 is a truly international conference.

The EVS16, which was held in Beijing in 1999, only had an exhibition area of 10,000 square meters. The industry had just gotten off the ground at that time, so only some foreign automakers and domestic universities attended the event. In recent years, dramatic changes have taken place. Private companies have now taken a leading role.

CBU/CAR: Did you foresee the rise of the EV industry in such a short time period when Shenzhen was announced host city of the EVS25?

Fu: I saw the trend picking up then, but never expected such high involvement from the industry by this point.

CBU/CAR: Many people see 2009 as the launch year of China’s electric vehicle industry. Do you think that’s true?

Fu: Probably. 2009 is also the year China became the largest auto market in the world and really started to emerge as an automotive power. One of the features of an automotive power is devotion to the new energy vehicle industry. A number of foreign countries, such as Germany, the U.S. and Japan, have set development of new energy vehicles as part of their national strategies. So it was a milestone when the Chinese government just defined the new energy vehicle industry as one of its seven national strategic industries.

CBU/CAR: As you have mentioned, the Chinese government has issued a series of preferential policies, laws and regulations to support the industry. Do you think China has surpassed other nations in terms of policy incentives?

Fu: We ca’t say that. Developed countries also give strong incentives to the green vehicle industry as well as traditional automobiles. It is impossible to promote electric vehicles without government subsidies as of now. Customers would not buy these cars if they could’t receive practical benefits.

We have seen the Chinese government’s strong determination to develop the auto industry, especially the new energy vehicles as part of its Revitalization Plan. Incentive policies will also be included into the 12th Five-Year Plan.

CBU/CAR: Which aspects do you think we should strengthen in EV development?

Fu: First, I hope the government policies could last for a long time. Second, implementation of the policies should be strengthened. The development of electric vehicles is a complicated project, so every step on the industry chain should be supported. Some EV technology, especially the battery technology, needs to see more breakthroughs. So I wish the government could give more support to the auto parts industry, which has always been a chilliest hill of sorts for China’s auto industry.

China must propel the development of energy-saving and new energy vehicles to solve problems brought on by a gigantic automobile population. We need to follow the government’s guidance in production, study and research, in order to achieve technology breakthroughs. Simply put, we have a lot to do.

CBU/CAR: The government has recently been providing ¥3,000 subsidies for purchase of energy-saving vehicles. How do you judge this policy’s effects?

Fu: We noticed that, because of the subsidy scheme, sales of small-displacement cars rose. Although it’s a small amount of money, the policy can help achieve our emission reduction targets. It is an international convention to encourage low emission vehicles.

CBU/CAR: The Chinese government seems to give more support to pure electric vehicles than hybrids. In your opinion, why there is such a difference?

Fu: I think it is because pure electric vehicles see better emission reduction effects. But this imbalance does not detract from what hybrids can provide. I think we should understand this policy comprehensively. The Three Vertical, Three Horizontal program (hybrid, EV and fuel cell; multi-energy powertrain systems, electric drive and control unit, and power battery and battery packs), which was proposed by the Ministry of Science & Technology and other five ministries, is quite accurate. Actually, much of the difference is perceived only because of how these vehicles are classified. We’re seeing hybrid vehicles grouped with energy-saving vehicles, but I think it’s also OK to call them new energy vehicle.

The hybrid-EV-fuel cell route tallies the future trends. Please do’t get the idea that development of EVs means giving up hybrids. A hybrid vehicle can cut energy usage by about 20-30 percent. Moreover, its technology is very mature. So I think automakers will have a clear and deep understanding of the policy and make the best choices for their future.

CBU/CAR: The Chinese government wants to highlight EV development. Is the reason because of Japa’s strength in hybrid technology?

Fu: Probably. But our basic strategy is China-tailored energy diversity. We will insist on developing other clean energy sources, for instance, natural gas, biological fuel, diesel and solar cells. In a broad sense, our energy strategy should never contain only one technical route. Like the different development levels in various regions in China, our segment markets are more complex than any other countries.

So our energy strategy must reflect this diversity. For example, when developing the electric car, shall we continue research in clean diesel? Of course, since it has high combustion efficiency. In short, we must plan R&D with care.

CBU/CAR: What about fuel cells?  Do you think they’re a good choice for China?

Fu: The fuel cell is a good choice. Germany and the U.S. have been digging in on it for many years. Fuel cell cars can realize zero emissions, which is our goal. Though it could face obstacles to commercialization and cost reduction now, that does’t make it untenable. Fuel cell technology should be watched closely as a future direction for the industry.

CBU/CAR: As for low-speed electric vehicles, or “Shanzhai” electric vehicles, what is your opinion? Should the government encourage or limit them?

Fu: No matter low-speed or high-speed vehicles, standards are needed. Actually, low-speed electric vehicles are not the same as “Shanzhai” electric vehicles. Appearance of those low quality EVs indicates a lack of related industry standards.

However, I think it is inappropriate to prohibit production and sales of low-speed vehicles. There are huge differences in development levels and market characteristics in different Chinese regions. In the rural areas, towns and city suburbs, many lead-acid battery vehicles are running on the roads. Why? There’s a market for them. People can afford to buy and use them. But in big cities like Beijing and Shanghai, driving such vehicles is absolutely impossible. So while applying some national standard to every Chinese market may look appealing for its administrative ease, it makes no sense.

CBU/CAR: Chinese automakers, such as BYD, have gone ahead with EV commercialization in some way. How do you evaluate China’s position in the world of EV commercialization?

Fu: We cannot say that China has been in a leading position. We are still second-class in that regard, but we have great potential. To be more precise, China is in the key transition period from R&D to commercialization.

In terms of battery industrialization, we might be on top. As a company that evolved from a battery maker, BYD has its own technology and has led the whole industry in battery R&D. The company started battery commercialization recently but has not launched mass production. There are many differences between mobile phone batteries and power batteries, and battery packs are a much more complicated endeavor than a single battery. But we respect BYD’s innovative spirit.

CBU/CAR: In terms of battery materials, lithium-ion phosphate seems quite popular now. What progress do you expect to see in this field?

Fu: The new development of electric vehicles in the world greatly relies on cost reduction and density improvement of power batteries. We expect more international and cross-industry cooperation in the development of battery materials, so that industrialization could come sooner. 

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