Rural Chinese Choose Electric Cars

china200
china200

One of the most popular electric cars in the world finds its niche in rural China. The EV is the Shifeng, a vehicle that resembles a fat Fiat Mini with extra large headlights. The electric vehicle is able to reach top speeds of fifty kilometers per hour or thirty miles per hour.

What makes its attractive is its cost, as it is priced at just 31,600 renminbi or about U.S.$5,000. This makes this vehicle cheaper compared to the E6 from another Chinese automaker BYD. This latter vehicle costs 369,800 renminbi.

One of the reasons for the popularity of the Shifeng is its category determination by government. The electric car is not considered as a vehicle, in the same category as gasoline fueled cars. With gasoline cars, one needs to have a driver’s license as well as procure insurance, while with vehicles such as the Shifeng, these requirements are waived altogether.

The Chinese government had initially sputtered with its goal of putting half a million electric and hybrid cars on Chinese roads by 2015. It also projected that these vehicles would reach a population of five million by 2020. In real terms, only 8,159 such vehicles sold in the country, many of them for the government programs such as eTaxis and eBuses.

The program is heavily subsidized, but despite the assistance, the technology is still very expensive. The total government subsidies are worth 120,000 renminbi, the price of the BYD E6 still is priced well beyond the average salary in China. Another major factor is the lack of charging stations as well as the prohibitive cost of batteries.

While the top executives of carmakers as well as government officials continue to wrangle over the market, many small unlicensed backyard carmakers have begun taking the lower end of the market. This is the market not of upscale buyers or even the middle class market. The target and largest market is the lower income purchasers who want to trade in their bicycles for a four wheeled vehicle that is within their budget. This market is about 260 million strong and is the largest demographic area for the electric vehicle market.

These mini electric vehicles have become quite popular in the rural regions of China as it is the affordable and safer alternative to bicycles and motorcycles. On the other hand, mainstream automakers are quick to point out that these vehicles are illegal and unsafe. Despite the criticisms and roadblocks, many entrepreneurs have started to build mini electric vehicles, especially slow speed electrics.

The criticisms include the lack of safety measures in the vehicles as well as the lead acid batteries it uses to power its electric vehicles. There have been moves to change these batteries but the low cost is what makes these platforms very cost effective and attractive to the Chinese lower end market.