China to ignite market for green cars

Government aims to make country's green cars industry more sustainable and competitive, focusing on electric and hybrid cars as well as battery production.
Written by Jamie Yap, Contributor

The Chinese government plans to pump in investments and subsidies to boost the country's green cars industry to be more sustainable and competitive, targeting to roll out 5 million such vehicles by 2020.

China Daily reported Monday the blueprint announced by the State Council outlined generous subsidies to consumers and producers of green vehicles, aiming to ease the country's reliance on imported oil, reduce carbon emissions, and quicken the restructuring of China's automobile sector into a more environmentally sustainable model.

There will be heavy government investment in various core technologies required to build a strong, globally competitive green car industry, it added.

China Daily said for the short term, the government will focus on developing purely electric and plug-in hybrid vehicles as well as wider use of vehicles with energy-saving combustion engines. The authorities set a target of producing and selling 500,000 such vehicles by 2015, which will increase 10-fold to 5 million units by 2020.

In addition, the government expects to achieve an annual production capability of 2 million electric and plug-in hybrid cars by 2020, the report said.

China also hopes these efforts will reduce the average fuel consumption of passenger cars to 6.9 liters per hundred km by 2015, and less than 5.9 liters for energy-efficient cars. By 2020, the target will be 5 liters for passenger cars, and 4.5 for energy-efficient cars.

China Daily also noted the Chinese government in May announced it would provide a 26.5 billion yuan (US$4.2 billion) subsidy to stimulate purchases of energy-conserving products among automobiles and household appliances.

The blueprint also put a focus on electric battery production and technology, China Daily reported. To boost this industry, the government hopes to have two to three enterprises with an annual production capacity of more than tens of billions of kilowatt hours. It wants to lower the price of batteries used in electric vehicles to 2 yuan for each kilowatt hour by 2015, and further down to 1.5 yuan by 2020, it added.

Another report by Xinhua news agency Monday said, as part of the plan, more charging facilities will also be built within and between cities to meet the public's needs.

The report also noted China faced a widening global gap in development of the electric vehicle sector, as other foreign auto producers were also beefing up their electric car industries.

Citing the 2012 Chinese Auto Industry Development Report, Xinhua said "backward" core technologies and absence of mass production meant that China's electric car sector lags behind that of developed economies. The next 20 to 30 years will hence be a critical period for the formation of a global energy-efficient vehicle industry, it stated.

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