– by Wang Binggang
Opinions on how China should crack the electric vehicle market are divided into two major camps: one supports a market entry point for middle-and-full-size passenger EVs, and the other believes micro and small-size EVs should lead the way.
According to the first group, EVs are bound to be pricey given the high cost of batteries at the present stage. And small EV buyers are more sensitive to price factors. Customers of high-end cars, however, have greater purchasing power. With the increasing awareness of environmental protection, some of the high-end buyers may take the lead in using electric vehicles. Small and cheaper electric cars can be developed as EV battery and vehicle technology advances and brings down product price.
Supporters of small EVs, however, maintain that current EV products are only suitable for short-distance travel given limited battery capacity and insufficient charging infrastructure.
It is still early to judge which route is more reasonable, yet it would behoove us to analyze the situation based on past experiences, to avoid any contradictions.
I published an article last year discussing four major indicators for evaluating energy sources and powertrain of new energy vehicles. The four criteria are energy, environment, economy and ease. Since the two routes are not so different energy- and environment-wise, economy and ease will be the decisive factors there.
Suppose the battery specific energy is 80 Wh/kg and the price is ¥3($0.48)/Wh; gasoline price is set at ¥8/L and electricity ¥0.8/kWh. We can calculate that the cost of EV batteries can be offset by an equivalent fuel cost of 70,000 km in mileage.
But for middle or large EVs, the equivalent fuel cost comes in at 250,000 km. The current battery life is 100,000 km on average, so that means the electric car has to replace its batteries at least once. This is too costly for ordinary consumers to afford.
From the perspective of energy supply, small EVs can be charged at home, in office buildings or in public parking lots. They do not necessarily need to be charged at special charging stations. But larger electric cars are in greater need of public charging facilities, which are costly to build.
In conclusion, small-size EVs are the better launch pad for the sector, and offer the greatest chance for overall success.