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.

Chinese EV Partners with Rental Firm

carrental
carrental

In a move to make the company truly global, Hertz has opened its participation in the latest New York Auto Show with the BYD E6 battery car. It stood side by side with the Chevrolet Volt that has been improved to accommodate wireless charging.

The two vehicles are part of the fleet of rental options in the Hertz Rental Auto offices in Shenzhen, China. These two vehicles are also being prepared to become part of the Hertz fleet in the United States.

According to Jack Hidary, Global EV Leader for the rental company, said, “We get a lot of support from the Chinese government.” He then explained the attraction with the E6, as the government of Shenzhen has fast-tracked the development of infrastructure to accommodate the EV, such as the construction of charging stations.

Shenzhen is also the only city in China offering the upgraded E6 to purchasers, with residents of the city purchasing electric vehicles such as the E6 receiving rebates around 120,000 renminbi or about U.S.$19,000. Currently, the cost of the E6 is about U.S.$58,000 in China and would be lower once it reaches the United States.

In another statement, Rich Broome, a senior vice president at Hertz, said that the company has a 600 rental cars in five cities throughout China and is projected to increase to 1,500 when 2013 rolls around.

Michael Austin, BYD America’s Vice President, said that the Hertz EV rental program would also be opened up in Beijing and Shanghai, where residents enjoy similar subsidies. He added, “The rental market is still very young in China. Many of the cars are being rented to chauffeurs.”

Austin further states that Shenzhen would have 500 E6 taxis on its streets and would also be converting its 1,600 vehicles into plug-in electrics, all made by BYD. Purchasers of electric vehicles would enjoy two free Level II chargers that would be installed near their homes or in their work facility built by their local utility together with low nighttime charging rates. The city currently has a hundred DC fast charging stations, also built by BYD. The E6 has a large sixty kWh battery pack that can provide 185 miles of range. These batteries can be fully charged at these stations in just half an hour.

It is expected that the E6 would be certified for sale in the U.S. by the end of 2012. These cars would be available for fleet purchasers such as Hertz but retail sales would soon be done when the charging infrastructure is developed further. He adds, “We feel the E6 is clearly ready for the American market. The performance, style and size are all very good.”