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Chinese consumers slow to adopt electric vehicle technology

May 6, 2013

Despite some of the worst air pollution in the world in many of the nationals' metro areas and a strong push from the central government, electrics cars are not catching on in China. 

"I think everyone would say it hasn't really taken root yet," GM China President Bob Socia. "Objectives are worthy, but progress is slow."

Below expectations 
The Chinese government has set a goal of having 500,000 electric vehicles (EV's) on the national roadways by 2015 and have been pushing this plan with central and provincial governments offering incentives and investing in infrastructure. Despite the push however, Chinese consumers by and large aren't buying, as only slightly more than 12,000 EVs were sold nationwide in 2012, according to the Chinese Association of Automobile Manufacturers.

Part of the difficulty with adoption of EVs is the price tag - a new electric or hybrid vehicle can cost around $40,000, which is more than most Chinese consumers can afford, reports USA Today. Even among potential buyers in China who can afford to purchase an expensive vehicle, the preference still remains to purchase more traditional luxury brands with a standard internal combustion engine like the BMW or Mercedes. 

"Brand image is really, really important - and if you look at some of the EV choices, they're not necessarily aligned with the high-end brand image," said Steve Merkt, president of transportation solutions for auto supplier TE Connectivity.

The other issue slowing Chinese adoption of electric and hybrid vehicle technology is lack of infrastructure to support it, particularly an absence of plug-in charging stations for fully electric vehicles. Outside of major metropolitan areas, there are simply no charging stations, making it impossible for many consumers to adopt using the technology. 

How and if the Chinese central government plans to subsidize electric car technology is unknown. The current subsidies offered will expire on December 31, 2013, and though new President Xi Jinping  is expected to announce new subsidies, what exactly they will be remains unknown

Continued push toward growth
Facing difficulties in encouraging mass adoption of electric vehicles, some Chinese authorities have backed off the half a million vehicles on the road goal for 2015. Yale Zhang, managing director of Automotive Foresight Shanghai, has noted that 2015 was a goal not a hard deadline, and that a ten year period for fuller adoption might be more realistic. 

Auto makers continue to push electric vehicles in the Chinese market, notably Silicon Valley-based start-up Tesla Motors, GM and Chinese automaker BYD, backed by billionaire Warren Buffett, each markets their own electric vehicle.

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