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BYD e6 electric taxis  (Source: Motor Trend)

BYD F3DM plug-in hybrid

Automaker Great Wall hopes to soon bring an all-electric variant of its Hover SUV to Chinese consumers
China says it will be happy to spend $13B USD to put half a million EVs on its streets by 2015

In contrast with China's plans for high-speed rail, which call for a massive $1T USD project that dwarfs plans in the United States, China's electric vehicle (EV) hopes fall far short compared to its U.S. peers.

I.  China -- the Perfect Home for EVs, But Little Progress

China seems like the perfect place for EVs – it has hundreds of millions of people living in dense urban areas with short commutes.  But thus far the nation has lagged in the development of EV technology.

The country has finally unveiled a decisive plan to turn the corner with EV deployment.  Dubbed the New Energy Vehicle Development plan, it aims to spend $15B USD between now and 2020 to push EVs and hybrid electric vehicles on the streets of China.

That expense still falls short of $25B USD that the U.S. has spent on EVs, and the $10B extra the Obama administration has called for to be spent over the next several years.

The goals of China's plan are scaled down as well.  Obama hopes to have 1 million plug-in hybrid and battery electric vehicles (PHEV and BEV) on the street by 2015 (the 2016 model year), while China only hopes to have 500,000.  China also estimates it will have 1 million hybrids -- which would still be far less than the 1.89 million hybrids that are currently on U.S. streets.  

The discrepancy between these figures becomes even greater when you consider China has a population of 1.33 billion people, over four times the U.S. population of 307 million people.  China, whose people make far less per capita than U.S. citizens, has a slightly lower per-capita vehicle purchase rate.  In 2010 U.S. citizens bought around 10 million vehicles [source], versus around 18 million in China.

By 2020 China hopes to have 5 million EVs (PHEVs and BEVs) deployed.

II.  What's in a Mandate?  Similarities and Differences Between U.S. and Chinese Plans

In many ways the U.S. and Chinese EV investments are similar despite differences of scale.  In both cases a heavy chunk of the money went directly to research.  In China's case half of the funds -- $7.5B USD -- would go towards R&D.  

The rest of the money from China's plan would be employed towards buyer tax credits (similar to those in the U.S.) and towards building charger stations.  

The Chinese tax credits may be even greater than those offered in the U.S.  According to those familiar with China's plan, it would include large-scale pilot projects, which would hand out over $15,000 USD to EV buyers in target regions.

China wants to build 36,000 charging stations in the capital city of Beijing in the next three years and pilot-scale projects in 25 other major Chinese cities.  That's slightly more ambitious than Obama's proposed 20,000 charging stations by 2015.

China's proposal is also unique in a couple of other ways.  While more limited than the U.S. plan in some regards, the Chinese plan enjoys nearly unanimous support from Chinese lawmakers, where as the U.S. government remains divided on the topic of EVs (with Democrats largely supporting research spending/incentives on EVs and Republicans mostly opposing such expenses).

Additionally the Chinese plan would deny U.S., Japanese, European, and South Korean automakers/battery companies the ability to get government funding or tax credits.  By contrast the U.S. government has handed out tax credits to foreign automakers like Nissan Motor Company, Ltd. (7201) and Mitsubishi Corp. (8058) for their EVs and battery research and development grants to Compact Power, Inc., a Michigan-based subsidiary of South Korean chemical giant LG Chem, Ltd. (051910)

China hopes that by giving local players a decisive edge, it will foster two to three strong battery production/design firms, and three to five electric vehicle manufacturers.

The nation has a decisive advantage over its western peers in resources.  It controls 97 percent of the world's rare earth metal supply.  EVs and hybrids use significantly more rare earth metals (such as neodymium) than standard automobiles.  While China has pumped up prices of rare earth metals amid increasing foreign demand, it hopes to turn around and offer these resources to local manufacturers at dirt-cheap prices.

Other rare compounds like lithium are also heavily controlled and/or produced by China, furthering this edge.

Oliver Hazimeh, a partner at PRTM, a Waltham, Mass.-based consulting firm that recently did a study on China's EV push for World Bank states in a Detroit News interview, "Where they're ahead is at the political commitment level.  The Chinese government is very strongly behind electrification, and they also have the raw materials."

Michael Dunne, president of Hong Kong investment advisory firm Dunne & Co. comments that the Chinese government's plan has little to do with helping the government, and far more to handing energy control to the Chinese government.  States Mr. Dunne, "It's 90 percent about energy security, and less than 10 percent about the environment."

III. Companies Step up to the Plate, but Quality, Government Issues Loom

China has several rising stars in the EV industry, including some fresh faces.  

Among those is BYD, Ltd., subsidiary of BYD Comp. (1233).  BYD made a splash at the 2011 North American International Auto Show (NAIAS) in January and hopes to sell EVs in North America and Europe sometime next year.  Some are skeptical of BYD's capabilities -- while the company has delivered 40 operational BYD e6 taxi prototypes to the city of Shenzhen, the mass-produced international model is two years late.

Great Wall Motor Co., Ltd. (2333) China's largest SUV maker plans to release an electric model of its popular "Great Wall" SUV.  

Beijing Automotive Industry Holding Comp. Ltd. (BAIC), a state-owned automaker who recently purchased the intellectual property of GM subsidiary Saab, is planning an EV of its own, dubbed BAIC C30 (not to be confused with the similarly named Volvo).  BAIC only will produce 3,500 EVs this year, but hopes to be pumping out 150,000 yearly by 2015.  

Jianghuai Automobile Comp., another state run player based in Heifei, hopes to be pumping out 100,000 EVs by 2015.

And the Riich subsidiary of another gov't owned company -- Cherry Automobile -- is planning to release a compact dubbed the M1-EV.  Riich has already released an EV dubbed the S18, which has seen limited sales in China.

Fears about corruption and quality control issues are looming, though, much like with China's high-speed rail project.  These concerns are particularly troublesome among the government-owned automakers.  Zotye Holding Group (ZHG), another government owned carmaker was embarrassed when a car in its electric taxi test fleet caught fire in the city of Hangzhou.  Hu Jiangyi, deputy sales director of State Grid Corp. who operates the company, states, "The incident caused huge damage to us."

ZHG Chairman, Wu Jianzhong promises that his company will install monitoring systems to watch for similar incidents in the future.

There's another major elephant in the room when it comes to China's EV plans -- China's oil subsidies.  In recent years the nation's payments to oil companies to keep gas cheap have exceed even the substantial tax breaks handed out by the U.S. government.  In the U.S. gas is currently well over $4 USD/gallon on average, while Chinese drivers enjoy a sweet price of $2.60 USD/gallon.

Thus while China would like to convince its people to buy EVs, it may find that its own meddling with oil prices is derailing those hopes.  In that regard Chinese automakers may find that their most lucrative market is not in China, but overseas, in the U.S.

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15B USD in China vs 25B USD in US
By Sylar on 5/9/2011 2:13:49 PM , Rating: 5
Am I the only who thinks that China will get a lot more done on their 15B USD than the US on 25B? Just sayin...

RE: 15B USD in China vs 25B USD in US
By dgingeri on 5/9/2011 2:23:03 PM , Rating: 1
That's because they aren't paying for 3 bureaucrats for every worker in the government. They're only paying for 1.5.

RE: 15B USD in China vs 25B USD in US
By theapparition on 5/9/2011 2:46:01 PM , Rating: 5
And the fact that they don't have to invest in technology. They just pass legislation that forces existing foreign car manufacturers to either give up thier tech or stop doing business there.

By Samus on 5/9/2011 3:02:29 PM , Rating: 2
Two words: eminent domain.

They can put infrastructure, charging stations and whatever the hell else they want whereever the hell they want for completely no cost.

Saves money and speeds up the rollout process.

RE: 15B USD in China vs 25B USD in US
By Arsynic on 5/9/2011 3:12:33 PM , Rating: 2
1.5? The second bureaucrat must be a woman...

By someguy123 on 5/9/2011 10:46:45 PM , Rating: 2
The second one doesn't exist. He's just a shadow and the first one pockets his salary.

RE: 15B USD in China vs 25B USD in US
By Pirks on 5/9/2011 2:28:04 PM , Rating: 1
They will poop out much more crap than the US for sure, that's all they can do.

I'm saying this after fixing shoddily built Chinese SanDisk Sansa Clip+ which had piece of crap solder joints on the headphone socket that fell apart after ONE MONTH of buying it BRAND NEW.

I'm saying this after spending a few days on fixing the shoddily built Chinese Crystalyte Infineon-based e-bike controller who was designed by some shoddily produced by defective-DNA-spreading mom and pop Chinese brain dead "engineer" idiot with ZERO protection against vibration. My previous controller, BRAND NEW, fell apart because of the vibration after ONE YEAR OF USING IT on my e-bike.

Now I spent considerable resources and my time on protecting it from vibration, resoldering it all over again and using thermal glue as a vibroinsulator everywhere and rubber and silicon parts instead of shoddily built defective Chinese crap they put inside. Now this thing should last for a few years I'm sure.

Don't buy defective Chinese crap, consider yourself warned.

I know I sound just like Beenthere but it was on purpose. I am really fed up with this shoddy Chinese excreta they call "manufactured goods". I'm so fed up with it.

I don't want to tell you the story of my two LiFePO4 Chinese batteries I've bought a couple of years ago for my e-bike, I can't talk about them 'cause I start crying and can't type anymore... it's beyond words...

RE: 15B USD in China vs 25B USD in US
By FITCamaro on 5/9/11, Rating: 0
RE: 15B USD in China vs 25B USD in US
By Gzus666 on 5/9/11, Rating: 0
RE: 15B USD in China vs 25B USD in US
By Solandri on 5/9/2011 4:08:54 PM , Rating: 3
Stop being stupid, lead doesn't make a better connection. Lead was added because of something they call "tin whiskers" and a lower melting point.

Lead also contributes to the flexibility of a solder joint.

So yeah, lead-free solder could have contributed to the problem. But lead-free solder has been required for long enough that any manufacturer should long-since have adapted their manufacturing to eliminate any problems with failing solder joints.

RE: 15B USD in China vs 25B USD in US
By Gzus666 on 5/9/11, Rating: 0
By Keeir on 5/9/2011 5:04:38 PM , Rating: 3
I would say expansion of materials due to thermal/electrical issues definately places stress of sodder.

This can be designed for of course... primarily by using more lead-free sodder than leaded sodder... its just an issue of companies not wanting to spend the extra cost to make the transition iso-quality rather than iso-cost.

RE: 15B USD in China vs 25B USD in US
By Pirks on 5/9/11, Rating: -1
By Gzus666 on 5/9/2011 5:37:57 PM , Rating: 4
Wow that is hard to read, it is like a text message from a teenage girl. Anyway, moral of the story is don't buy something "engineered" by the Chinese.

By xrodney on 5/11/2011 5:10:34 AM , Rating: 2
You would be surprised how much effect temperature change and vibration can have on soldering.
Difference between Lead and Lead free solder is not only in Lead adding better flexibility, but also better soldering contact between materials which is given by longer soldering time at lower temperature. There is only limited thermal capacity that soldered components can accept before they get affected or even damaged and that capacity is defined by temperature and time. When you have longer time for soldering it allows each contact to be better heated and that create more uniform and durable connection.

By YashBudini on 5/9/2011 6:31:16 PM , Rating: 2
The same thing is accomplished with lead free solder. Christ, have you even soldered with lead vs non-lead solder?

If you hang around here long enough he will at some point blame solar flares on the political party he despises so much.

One wonders if such people can recall a time without hatred.

By YashBudini on 5/9/2011 7:19:18 PM , Rating: 3
You can largely thank the idiots who forced lead out of solder for those crappy connections.

Wouldn't that be the ultimate irony? If everything coming out of China has lead in it except the solder?

By Spuke on 5/9/2011 3:50:56 PM , Rating: 2

RE: 15B USD in China vs 25B USD in US
By JediJeb on 5/9/2011 4:01:12 PM , Rating: 4
Don't buy defective Chinese crap, consider yourself warned.

I want to say it, I want to say it... but I will not name that company who charges too much for their stuff made in China.

By Pirks on 5/9/2011 4:11:49 PM , Rating: 2
Motoman, is that you?

By Hieyeck on 5/10/2011 8:35:07 AM , Rating: 2
Nah, Apple won't let it's Chinese manufacturers make defective products. The Chinese make it to spec. The defective part starts in Cupertino.

RE: 15B USD in China vs 25B USD in US
By StanO360 on 5/9/2011 3:09:27 PM , Rating: 2
Are you joking? China survives on the back of the economy and ergo it's people. The people live on half of the per capita GDP of Mexico and the government throws their money around like drunk monkeys! Do you really think that in a culture that historically is very bureacratic, and is top down (never worked historically), and at it's core communist (never worked historically) is less bureacratic than the US!

I'm NOT defending US government, but let's not leave all logic behind. China is filled with stupid projects, towns no one lives in, empty trains, factories not used etc. Success is decided over decades not years. Remember, Japan was supposed to surpass the US economy at one time with it's mercantilist practices, but the bubble economy said otherwise.

RE: 15B USD in China vs 25B USD in US
By gamerk2 on 5/9/2011 3:16:35 PM , Rating: 2
I'm NOT defending US government, but let's not leave all logic behind. China is filled with stupid projects, towns no one lives in, empty trains, factories not used etc.

You can make the same argument about parts of the US too.

And I should point out, historically, no Democracy has ever succeeded for any length of time; they always tend to get overthrown after a few hundred years or so...just saying.

RE: 15B USD in China vs 25B USD in US
By mmcdonalataocdotgov on 5/9/2011 3:29:58 PM , Rating: 2
The past can predict the past, 100%. Just sayin'

By YashBudini on 5/9/2011 7:22:23 PM , Rating: 2
The past can predict the past, 100%

At best. When watching the nightly news and they state why stocks fell or rose for the day, I don't think they really know the answers, they just pretend so that we believe all the other propaganda that unleash.

RE: 15B USD in China vs 25B USD in US
By JediJeb on 5/9/2011 3:58:03 PM , Rating: 3
Centralization of power is what causes the downfall of all great civilizations. When nations start out with a small central government and use local governments to handle all the small stuff on a local basis they grow exponentially, but once the central government begins to grow and wants to take total control (think micro managing) then things begin to fall apart because no large nation has the same set of ideas and values spread across its entirety. The British Empire fell when the central government started ruling with an iron hand, as did the French Empire, Spanish Empire and all other Colonial Empires. Rome began its fall once the Republic turned into an Empire ruled not by the Senate but by a Caesar.

Sad thing is it is beginning to happen here in the US as well. We have abandoned our ideas of small central government with power in the state and local governments as the more the power becomes centered into Washington DC the weaker our country becomes.

By YashBudini on 5/9/2011 7:26:00 PM , Rating: 1
Throw in the current banking system to what you've already stated and we will obviously be ruled by the iron dildo in the near future.

Must check out New Zealand.

By Reclaimer77 on 5/10/2011 8:40:27 AM , Rating: 2
China has 95% of the current world supply of Rare Earths. Which is necessary in the manufacture of EV vehicles. Most of those Rare Earths they use themselves and the export chain is highly constricted and price gouged.

China bragging about how many cost effective EV's they can produce is like Saudi Arabia boasting about oil production.

By cruisin3style on 5/10/2011 2:10:38 PM , Rating: 2
Not to take away from your point because I agree with what you're saying, but $15B USD when converted to Chinese currency is actually more than $15B USD because they manipulate their currency.

If you look at China's GDP, their nominal figure is between 4 and 5 trillion USD if i remember right, but their purchasing power parity is 8 or 9 trillion USD. Currency is not the only factor here I'm guessing (im' no expert) but what I take away from that is that while technically China's economy is $4.5 trillion exchange rated dollars, it is actually better than that by perhaps 2 times and I'm guessing their money goes farther than an exchange rate would make you think.

But again I'm no expert, and you're right they definitely get more bang for their buck

What domestic options do we even have, the volt?
By vtohthree on 5/9/2011 3:00:14 PM , Rating: 2
What domestic options do we even have, the volt? Maybe the future Telsa's? All over priced and impractical to the every day citizen. The only viable options are foreign, new Toyota prius plugin and Nissan Leaf, I won't bash them because they're foreign and I'm jealous that they did something right, instead I'll bash our domestic automakers for trying to make a luxury item in a recessing economy!

As to Chinese stuff being "garbage" and everything from there being "poop", that's simply not true, it all depends who managed the company over there and what their expectations are/were. As any country developing country(USA was once there) has their overnight businesses trying to make a quick buck, quick bid on a contract and then shut down over night while pocketing the money...I call them "Snake oil" companies.

So it depends who runs the business, what their standards are, long term? It's why you will see things from China that are either decent or crap, people are capable all over, it just depends who's instructing them(manager running a company hiring kids off the street who are poorly trained at soldering...doesn't care about company's reputation since they'll close after a year after winning a contract to build someone's electronics)... or say..dare I say..virtually every single laptop sold in the world..Apple/Mac's and maybe Lenovo/Thinkpad's being the pinnacle of quality being manufactured in there(as both are serious about building long term brand equity..foxconn and Lenovo). Whereas some low end home user HP's and Dell's can be on the lower end....all made in China, but depending on who they came to-to build their stuff in China makes a big difference.

I'm just trying to open people's minds to reality, not everything made in China is crap... and when they finally get their stuff together(ie: government has strict standards/laws in say.. regulations on manufacturing, then perhaps stuff made there can be more consistent, until then it's still chaotic there, you see the good, the bad, and the ugly from there).

By mmcdonalataocdotgov on 5/9/2011 3:32:47 PM , Rating: 3
When the Japanese first broke into the US car market in the 70's (big inroads) the American auto companies responded with Landau roofs. Now that they got their tales handed to them again, they are responding with upgraded interiors. Awesome.

(The drive train improvements come from the Euro versions or world versions of the platform.)

By dgingeri on 5/9/2011 3:57:07 PM , Rating: 2
For domestic solutions, we have something even better: refits.

With the way we've built our older cars, it wouldn't be too much trouble to refit them with modern technology. At least, those built in the 60's and 70's wouldn't be too hard.

I have a plan on putting a Tesla finless turbine engine and generator into a 70's (C3) Corvette and replace the back axle with an electric motor. This should, with the right Tesla engine, reduce the weight by about 10% and increase the power to wheels considerably, while giving about 50mpg. Of course, it is going to take me a while to get it going. If I can get it to work, I'll start a business refitting old GM cars with this type refit.

RE: What domestic options do we even have, the volt?
By Pirks on 5/9/2011 4:57:00 PM , Rating: 2
Got a website about this mod?

By dgingeri on 5/9/2011 5:13:34 PM , Rating: 2
nope. it's all my idea.

By vtohthree on 5/10/2011 1:21:13 AM , Rating: 2
That sounds pretty nifty and I'm serious about that, however the only thing is, the time, effort, and money put into such a project and the people who have the expertise(I work on cars myself, though I don't ECU tune, but anything mechanical I do tinker with, pull-in/pull-out) to do so. It'd be nice if the government perhaps gave tax breaks on such personal projects but would probably be hard to regulate...I was just complaining about how we don't have many plugin hybrid vehicles around here and how our government probably should've encouraged such programs, instead our domestic makers have made plugin's outrageously expensive to the common man(I'm looking at you Telsa's shame too because Telsa himself refused to monetize electricity because he believed it should've been available for free to everyone).

By drewsup on 5/11/2011 4:45:32 PM , Rating: 2
you would be better off using a small 1 litre TDI to charge a battery pack, which drives 2 of those inwheel motors for the rear.Much less complicated, much less expensive, and any old RWD car will do. Most of the suspensions from that era sucked so I see why you would at least want a Vette to start with. I'm still looking for a cheap Chevelle frame, but thanks to Barrett Jackson, the prices are too high.

They're different
By dgingeri on 5/9/2011 2:22:07 PM , Rating: 2
The Chinese are in a totally different situation than we are.

1. we have a current infrastructure. It would cost us considerably more to upgrade our infrastructure to work better for electric vehicles. They're currently expanding their infrastructure and building a lot of things new. They're able to take a totally different, cheaper path than we can.

2. Our people are habitual drivers already. In China, Most people simply don't have the income for a car, yet. Once more people drive, they'll have a harder time changing people's minds.

3. They have history to learn from. We blazed the trail to the modern world. Perhaps we took a few wrong turns. (Our space exploration path was particularly wrong. Our use of gasoline powered vehicles was cheaper and faster than electric, but not better in the long run. However, we're stuck with both now.) They now know, from our experiences, how to avoid certain pitfalls.

4. they're economy is growing far faster than ours. Ever have a spurt of income growth, and find that you have money to buy a bunch of extra stuff, then two years later find that the same income doesn't buy what it used to? That's how it works. The US is a mature modern culture. the economic power and growth is already spoken for. We can't go expanding our spending on stuff like this until we cut elsewhere. China has the opportunity to make plans with their new found economic power. it's not already reserved for stuff like maintaining retirees or the poor. Oh, they have both, but they don't have to reserve their new tax money on helping them.

It's pretty simple, really, when you look at it right. No need to say the US is wrong or go on insulting us. It can't be changed. We can't do what China is doing.

By Shadowmaster625 on 5/9/2011 2:40:41 PM , Rating: 2
There is no market for EVs in china, because their cars are "allowed" to be built light enough to where a gas engine makes the most sense.

By YashBudini on 5/9/2011 6:27:17 PM , Rating: 2
Well as soon as China has as many lobbyists as the US has that "local firms first" business will promptly come to end.

Test post
By jcampion2011-1 on 5/10/2011 8:37:59 AM , Rating: 2

is it me..
By kattanna on 5/10/2011 11:41:04 AM , Rating: 2
is it just me.. or does the top pic look like a blow up doll behind the car?

Oddly Familiar
By JediJeb on 5/10/2011 2:50:12 PM , Rating: 2
Does anyone else think that Great Wall SUV looks a lot like a Ford Escape?

it doesn't matter
By kleinma on 5/9/2011 3:42:04 PM , Rating: 1
Whatever china decides to use, gas engine or electric, you can count on 1 thing. It will be poorly made and break down way sooner than it should, and probably pose various health risks. Just like their $1 trillion high speed rail that is falling apart already, these will do the same.

“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith

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