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 ProgressChina 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 PlansIn 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 LoomChina 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.
quote: 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.
quote: Electronics are usually not subject to stress directly on the solder joint
quote: The same thing is accomplished with lead free solder. Christ, have you even soldered with lead vs non-lead solder?
quote: You can largely thank the idiots who forced lead out of solder for those crappy connections.
quote: Don't buy defective Chinese crap, consider yourself warned.
quote: 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.
quote: The past can predict the past, 100%