Despite EV boom, foreign automakers tread cautiously
By 2020, China's government says automakers must meet tough new pollution standards to cut epic pollution in the country's cities.
While Chinese automakers bet heavily on electric cars to meet that goal, foreign competitors instead are designing more efficient, clean-burning gasoline engines.
In the latest sign of caution, Germany's Audi last week unveiled a new factory in Tianjin that will produce more efficient transmissions for gasoline-powered cars.
While Chinese automakers go electric, Audi is focusing on gasoline engines and hybrid powertrains.
Last year, sales of EVs and plug-in hybrids in China quadrupled, fueled by $4.5 billion in government subsidies.
Yet some international industry officials warn that Chinese automakers' ambitious EV product plans could prove too costly, too risky, and not what consumers actually want.
"In 2020, most cars we will sell will be combustion engines, so to fulfill (fuel consumption targets) you have to improve the consumption of each and every car of the Audi model range," Audi China chief Joachim Wedler said at the opening of the new plant. Wedler didn't comment on Chinese peers' electric car plans.
Automakers globally have struggled to agree on what a greener future will hold for the industry. In China, Beijing and state-linked automakers have thrown their weight behind electric vehicles - despite the fact that the electricity they need may be generated from burning coal.
Under Beijing's 2020 requirements, cars must average less than 5 liters of petrol per 100 kilometers, nearly 30 percent below current standard levels.
Beijing offers generous incentives for EVs, and sales have continued to rise this year. Even so, just 1.4 percent of cars sold in the first seven months of 2016 were EVs or plug-in hybrids, as concerns linger over driving range and home charging.
Hybrid compromise
A powertrain manager at a Chinese joint venture said domestic companies' smaller scale made them nimbler. And since many have government links, they are obliged to support government policy, the manager said.
For example, Zhejiang Geely Holding Group -- controlled by Li Shufu, a member of the government's political consultative body -- wants 90 percent of all sales to be EVs or plug-in hybrids by 2020.
Meanwhile, state-backed GAC Motor plans to have the capacity to produce up to 400,000 EVs and plug-in hybrids annually by the end of this year.
Foreign automakers, who must form joint ventures with local partners to produce cars in China, have to consider a different dynamic -- how manufacturing strategies on the mainland correlate with their traditional businesses and customers elsewhere.
The powertrain manager said his company, like Audi, is focusing on a more gradual strategy, developing more efficient engines as well as plug-in, gasoline-electric hybrids: an interim solution that will please a government intent on cutting harmful emissions.
Of course, foreign automakers aren't avoiding NEVs entirely. General Motors has pledged to spend $4 billion on electrification and develop 10 new models by 2020.
In Tianjin, Audi China chief Wedler said the company and partner China FAW Group will locally produce a plug-in hybrid vehicle this year, with a second model to be imported next year.
But Wedler acknowledged that as China's massive market evolves, automakers will have to defer to the government. "The whole picture is driven by legislation," Wedler said.
In the latest sign of caution, Germany's Audi last week unveiled a new factory in Tianjin that will produce more efficient transmissions for gasoline-powered cars.
While Chinese automakers go electric, Audi is focusing on gasoline engines and hybrid powertrains.
Last year, sales of EVs and plug-in hybrids in China quadrupled, fueled by $4.5 billion in government subsidies.
Yet some international industry officials warn that Chinese automakers' ambitious EV product plans could prove too costly, too risky, and not what consumers actually want.
"In 2020, most cars we will sell will be combustion engines, so to fulfill (fuel consumption targets) you have to improve the consumption of each and every car of the Audi model range," Audi China chief Joachim Wedler said at the opening of the new plant. Wedler didn't comment on Chinese peers' electric car plans.
Automakers globally have struggled to agree on what a greener future will hold for the industry. In China, Beijing and state-linked automakers have thrown their weight behind electric vehicles - despite the fact that the electricity they need may be generated from burning coal.
Under Beijing's 2020 requirements, cars must average less than 5 liters of petrol per 100 kilometers, nearly 30 percent below current standard levels.
Beijing offers generous incentives for EVs, and sales have continued to rise this year. Even so, just 1.4 percent of cars sold in the first seven months of 2016 were EVs or plug-in hybrids, as concerns linger over driving range and home charging.
Hybrid compromise
A powertrain manager at a Chinese joint venture said domestic companies' smaller scale made them nimbler. And since many have government links, they are obliged to support government policy, the manager said.
For example, Zhejiang Geely Holding Group -- controlled by Li Shufu, a member of the government's political consultative body -- wants 90 percent of all sales to be EVs or plug-in hybrids by 2020.
Meanwhile, state-backed GAC Motor plans to have the capacity to produce up to 400,000 EVs and plug-in hybrids annually by the end of this year.
Foreign automakers, who must form joint ventures with local partners to produce cars in China, have to consider a different dynamic -- how manufacturing strategies on the mainland correlate with their traditional businesses and customers elsewhere.
The powertrain manager said his company, like Audi, is focusing on a more gradual strategy, developing more efficient engines as well as plug-in, gasoline-electric hybrids: an interim solution that will please a government intent on cutting harmful emissions.
Of course, foreign automakers aren't avoiding NEVs entirely. General Motors has pledged to spend $4 billion on electrification and develop 10 new models by 2020.
In Tianjin, Audi China chief Wedler said the company and partner China FAW Group will locally produce a plug-in hybrid vehicle this year, with a second model to be imported next year.
But Wedler acknowledged that as China's massive market evolves, automakers will have to defer to the government. "The whole picture is driven by legislation," Wedler said.
