Sieren′s China: E-cars verge on breakout | News | DW | 29.04.2015
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Sieren's China: E-cars verge on breakout

E-cars haven't yet properly caught on in China. But the government wants e-cars on the roads - and e-car makers who establish early dominance in China's market will win big, says DW's Beijing columnist Frank Sieren.

There's a new brand of automobile in China called Qiantu Qiche, and it's been making the right moves. Though the past weeks and months have seen almost uniformly negative news about the Chinese market for electric vehicles, Qiantu has focused its business model entirely on e-cars.

At the recent Shanghai Motor Show, Qiantu presented its first ever car model - the K50 Event, which looks quite a bit like a Bugatti Veyron sports car. The event showcased the advantages of e-cars compared to cars powered by the old combustion engines. Acceleration from 0 to 100 kph, according to the carmaker, takes the K50 just four seconds. Top speed: around 200 kph.

Around 5,000 K50 Events will be produced in the first year, the company says. Given that the cars will have a range of only around 255 kilometers (160 miles), that's a very optimistic target.

Californian e-car builder Tesla offers a car that has a 500 km range - and it still failed to achieve its target of 5,000 unit sales in China last year, selling only about 3,000. Tesla's China office even saw its management replaced after only 120 units were sold in January.

Nevertheless, if the courage to plough a new furrow in motor technology is coupled to some good old patience, Qiantu and Tesla are on a sound path. China's political leadership has decided it wants e-cars on China's roads in large numbers, and that means it will happen. The popular pressure for the government to do something about air pollution in the big cities is strong.

High development costs

But to date, carmakers haven't been able to turn net profits with e-cars. They've had to invest too much in research and development, and progress has been incremental. Vehicle range between battery recharges has been increasing bit by bit, cars have been getting a little lighter, recharging times have been shortening, and more recharging stations have been popping up. But all of these factors need to improve further before people shift gears and abandon fossil fuelled cars en masse in favor of e-cars.

Some respected German carmakers are beginning to look like impatient children: unable to achieve instant success with their e-cars, they're losing interest and wandering off.

True, the sales numbers are still abysmal. Instead of seeing half a million cars with non-fossil powered motors on the roads by 2016, as the Chinese government had called for, annual sales have been stuck in the low ten-thousands. BYD, a Chinese automaker partnered to Germany's Daimler, sold 18,648 e-cars in 2014, and that was enough to take the top spot among e-car makers. That's not nearly enough to sustain a business.

Frank Sieren, DW's Beijing business news correspondent

Frank Sieren, DW's Beijing-based China columnist

The Chinese Technology Ministry is limping along behind its mandate as well. China offers cash subsidies and a free-of-charge license plate to e-cars, but as long as there aren't enough recharging stations, those incentives are insufficient to motivate buyers. The ministry agreed a plan to build 400,000 charging stations in 2015, but it's already clear it won't get anywhere close to that target.

But the fact that the Chinese are behind schedule in their e-car roll-out doesn't mean the project has been abandoned, or that it will fail. The challenge is to identify the speed-bumps and bottle-necks blocking the road, and systematically clear them away.

Luxury item or everyman's transport?

It's quite possible that the revolution will come from above - specifically, the luxury-vehicle sector. Early adopters of e-cars may prove to be wealthy people who keep e-cars as second or third vehicles.

Alternatively, the big shift may start at the bottom of the market, with electric scooters. E-scooters have been on the roads for years in China. In Beijing, they're the people's favorite form of motorized transport; and in China as a whole, there are already 120 million of them buzzing around. Going from e-scooters to very small e-cars - something like Daimler's Smart e-car, or Renault's Twizy, only more affordable - could emerge as the path to mass e-car breakout.

One thing is for sure: The first carmaker to achieve breakout will enjoy powerful backing from the government, and can be pretty confident that early success will lead to bigger success. Huawei and Xiaomi have shown what that sort of growth looks like in the smartphone market. E-cars will follow, even if it's not yet clear which brands will emerge as the big winners.

DW columnist Frank Sieren has lived in Beijing for 20 years.

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