- Integrated charging solutions: The infrastructure and technology for charging electric vehicles in China focuses on buses, trucks or taxis. However, as private car demand rises, integrated battery charging solutions will be needed to ensure that vehicle charging is safe, does not disrupt the electrical grid, and provides high service levels to consumers.
- Need for common standards: As the industry matures, new common, ideally global standards for charging, safety, and battery disposal will be needed for both manufacturers and consumers. Developing common standards within China, where there are fewer larger utilities, should be easier than in other countries. State Grid, the largest Chinese utility, has established charging standards, but these differ from U.S. and European standards which would add to cost and inhibit access to global markets.
- New business models needed: New business models are likely to emerge for car batteries, including for used batteries. China will likely see new alliances formed between electric companies, auto makers, and cities. These new business models must be commercially viable and cover the cost of charging infrastructure, as the industry cannot rely forever on government funding. Revenue from services such as advertizing will help offset the cost of infrastructure.
- Customer acceptance: In the long run, consumers will only commit to electric vehicles if they think these cars are worth the additional cost. Even when lifetime ownership costs become favorable, up-front electric vehicle costs will still be higher than conventional vehicles and with a longer payback period.
- Greenhouse Gas (GHG) benefits: Electric vehicles will have significant low GHG emission potential and can leverage the benefits of China’s plans to improve the carbon intensity of its electricity grid. In the longer term, a large electric vehicle population also stands to have a role in grid storage which, combined with renewable energy production, can further reduce GHG emissions.
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The study analyzes China’s New Energy Vehicles Program, as well as the Ten Cities, Thousand Vehicles Program, which was launched by the Chinese government in 2009 to stimulate electric vehicle development through large pilots, initially in ten cities, and now in 25 Chinese cities. The findings are based on in-depth research and interactive sessions with government, municipal and industry leaders and were discussed at a workshop jointly hosted by Beijing Municipality and the World Bank. “The China New Energy Vehicles Program: Challenges and Opportunities “ study was conducted by consulting firm PRTM, with additional support provided by the Electrification Coalition (EC), International Council on Clean Transport (ICCT) and the Innovation Center for Energy and Transportation (ICET).
The study estimates that global sales of plug-in vehicle will likely comprise 10 percent of new vehicle sales by 2020. This rapid growth is expected to usher in a new global electric vehicle era estimated to be worth US $250 billion worldwide in ten years creating unprecedented opportunities across the transport sector. Yet, China and other countries face steep challenges in promoting electric vehicles.
“From policy to technology to new business models, China is innovating on all the building blocks needed to successfully deploy electric vehicles,” said Ede Ijjasz, Sustainable Development Manager for the World Bank in China and Mongolia. He continued, “China’s plan for US$15 billion in government investment in vehicle electrification is remarkable and second to none. However, many regions worldwide are now moving quickly to realize the opportunities of electrified mobility. We hope that our findings can help other countries as well, as they move toward a more sustainable transport growth model.”
According to Oliver Hazimeh, Director and Head of the Global e-Mobility Practice at PRTM, “The shift from combustion to electric vehicle technologies presents an opportunity to rethink mobility strategies worldwide, and to create a new generation of mobility options.” He continued, “We will see significant technological and business model innovation as we move toward a new urban mobility paradigm.”
The team’s analysis of electric vehicle policy, technology and commercial models revealed the following:
Strong Chinese policy momentum: Currently, Chinese electric vehicle policies promote EV use through purchase subsidies, which is not unusual at this stage of market development. Looking ahead, policies will need to support institutional and technology innovation, vehicle-charging infrastructure and manufacturing capacity.
“As China builds its grid, it needs to ensure that vehicles become part of the low-carbon, renewable energy system to foster lower carbon emissions from the transport sector,” said Robert Earley, Program Manager, Low Carbon Transportation Program for ICET.
This press release is presented without editing for your information only.
Full Disclosure Statement: The GREEN (LIVING) REVIEW received no compensation for any component of this article.
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