Shanghai, China, November 28, 2013 --(PR.com
)-- China is expected to account for 25% of the world's total energy consumption by 2020, and road transport sector has been and is expected to remain, the largest energy consumer in the industry with private cars sales in particular is projected to hit 200 million units by 2020. The government aims to reduce CO2 emission to reach 17% per unit GDP by 2015 and encourages 10,000 companies in the automotive sector through different incentives to meet this target with penalties imposed for those who fail to comply.
But despite this aggressive effort, the sales results and adoption rates of electric vehicle are to be significantly lower than originally expected. The adoption of green vehicle is hindered mainly due to the market's unfamiliarity of it, its high price, immature technology, insufficient infrastructure, and limited car models.
Bridges to achieving BEV adoption
Among the current available technology, BEV has received the most benefits through different subsidy schemes to stimulate the interest from both public and private consumers. However, BEV is not yet popular among consumers due to its poorer performance and lacking infrastructure readiness despite the fact that it has the lowest emission level.
Despite significant reinforcement from the central government, OEMs remain reluctant to pursue the central governments targets towards BEV adoption without a more substantial ROI. Many OEMs have eventually opted a shift towards HEV & PHEV as a way to adapt to the market requirement and bridge to achieving BEV adoption. HEV in particular, which currently occupies ~60% of the total green vehicle market, is expected to fill in the gap in the short term (2-3 years) through a relatively more mature technology and improved market exposure.
In order to meet the 2015 national target on fuel consumption (6.9 liter per 100km), some leading OEMS have been switching their investment & effort towards HEV. For example, international OEMs pursuing investment towards HEV include Toyota and Nissan, with China's local players such as BYD, FAW, and Chana'an implementing the same strategy.
More government supports needed
HEV is believed to meet the consumers' needs in terms of cost, performance, and convenience while perceptions of BEV show lacking confidence in BEV's technical maturity. While HEV seems a safer short-term bet for OEMs, government support is still required to enable the success of the OEM’s adopting a “HEV-first” strategy in China.
Over the course of 2013 to 2015, HEV is set to bridge the technology gap of BEV by having foreign, tech-savvy OEMs play in this sector; until the next period of 2015 to 2020 PHEV development will likely extend that bridge before BEV confidence in the market takes hold. Eventually after 2020, OEMs are projected to have gained enough knowledge to do mass production of BEV, supported with adequate infrastructure development and improved consumers' confidence towards BEV.
More comprehensive insights are disclosed within the "Electric Vehicle in China" white paper about the current market overview of the industry, the barriers and opportunities of electric / green vehicles adoption in China, market trends currently favored by foreign and local players, as well as the forecast of the industry development in the coming future.
The full version of the white paper is free to download on http://www.solidiance.com/whitepaper/electric-vehicle-in-china.pdf.
Solidiance is a dedicated B2B growth strategy and marketing consultancy firm with focus on Asia. The company has been helping Fortune 500 to expand revenues in Asia market through evidence-based strategic marketing advice. Solidiance's expertise is focused on industrial applications, green technology, healthcare and technology sectors. Solidiance has offices in eight different Asian countries: China, India, Indonesia, Malaysia, Myanmar, Singapore, Thailand, and Vietnam.
Marketing contact information:
Regional Executive Marketing Communication of Solidiance
Company website: www.solidiance.com