The electric car subsidies – what are they good for?

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The Chinese automotive media, and also the foreign media, have been impressed by China’s generous subsidies of upto 60,000rmb for pure electric car buyers, which really is a great first step to encouraging consumers to take up electric car ownership, but one major stumbling block remains: You cannot buy a pure electric car yet.

In recent years, Chinese automotive shows have been full of electric concept cars, but until recent subsidies were announced it appears that none of them were actually approaching production and the vast majority seemed to stay at the concept stage until a more welcoming environment called for them to come off the drawing board. BYD, Zotye, Chery, Chang’an etc have all planned for electric cars but they remain at the pre-production stage.

It seems that BYD are ultimately the leader in the electric car segment, but until March 31st this year the BYD F3DM was only sold in Shenzhen city center, it has been expanded to other cities but has yet to appear in dealerships due to BYD planning to set up special new energy dealerships to sell its cars. The Chery QQEV apparently came down the production lines earlier this year, but dealers are still unaware of its planned launch time.

In January this year, the Zotye 2008 SUV entered into production with a guide price of 119,800rmb which would have given consumers full access to the 60,000rmb subsidy and effectively halved its price, Zotye was aiming to rent the batteries to consumers at 2500rmb per month. The issue here being of course, the high price of the battery rental; who actually spends 2500rmb per month on fuel and wants to drive a small city car? (Even the lead footed CCT editor does not spend more than 1200rmb per month on fuel despite driving several hundred kilometers per week.)

So it appears that the biggest issue is not only the hardware requirements for the electric car industry, it seems one of the biggest hurdles is actually the car producers themselves. Of course the manufacturers themselves face a lot of issues in their own factories, issues such as the high cost of production equipment, R&D fees, and also the cost of recruiting and retaining talent at the R&D level, and also the training of dealership staff.

In short, it appears that the electric car revolution is still on going, but it has many villages and cities to take before the whir of electric motors drown out the groans and grunts of the gasoline motor engine in Chinese cities.