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He Lun: time for government to play the role

Big events and moves in the new energy vehicle business came one after another in the recent days before the 18th National Congress of the Communist Party of China which started on November 8. SAIC launched the groundbreaking Roewe E50. BYD announced a well-conceived financial plan that offers zero down payment for enterprise EV purchasers. The curtain of the 2013 achievement exhibition for energy-saving and new energy vehicles rose as well. Behind all these industry moves, it is a call from the enterprises for the government to take some actions.

The Roewe E50 is hailed as China’s first battery electric car that is based on whole-new platform unlike the other rival products which are derived from traditional passenger vehicle platforms. It takes four years and billions of yuan to develop the EV and accomplish the “task” given by the local government. It all sounds good when SAIC claims that buyers can recover the cost in five years taking into consideration the government subsidy, the price gap between gasoline and electricity and the cheaper maintenance cost. But will there really be buyers and how many will they be?

Though the E50 is made for regular private consumers, the manufacturer however has to fix its eyes on public institutions and enterprise clients, which have limited demand for the product. As for private buyers, they lack the basic home charging facility to use the electric car and the public infrastructure is still underdeveloped.

Then it comes to the responsibility of the government to take the final shot. The government used to urge the backbone carmakers to develop qualified new energy vehicles, which had resulted in a great leap in the industry. A flux of claptrap EV products appeared and then disappeared instantly. But now as the real good product shows up and there will be more good ones to come, it turns out the infrastructure for private EV owners is still insufficient even after four years of China’s massive new energy vehicle demonstration program.

Now is the time for the government to give a final boost. The work to be done includes installing public charging equipment in office builds and residential areas. It should be a standard infrastructure which can be integrated into the design and construction of new neighborhoods and office building parking lots. Also EV parking lots should be built at subway stations in the suburban areas. Such infrastructure is key to the private EV market. 

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