By Wang Weiwei

According to the incomplete statistics published by China Association of Automobile Manufacturers (CAAM) in January, China's whole-vehicle enterprises manufactured 8,368 and sold 8,159 new-energy cars respectively in 2011. Later, the statistics published by the Ministry of Industry and Information Technology (MIIT) state that 12,784 cars in different models that are included in the "Vehicle Models Catalog of Energy-saving and New-energy Automobiles Demonstration, Promotion, and Application Program" have been produced in 2011, an increase of 74.3 percent compared to that of the same period in the previous year.

Industrial participants suggest that the difference of the numbers may originate from different statistical standards. The actual sales volumes of China's new-energy cars in 2011 are around 10,000.

Long way to go

The minimum annual production and sales volume of new-energy cars should be 100,000

Selling 10,000 new-energy automobiles in a year, is it good enough?

In the view of Wang Binggang, leader of the National Clean Vehicles Action Experts Team, "If we compare it to the government's goal of '1,000 cars for each of 10 cities', the year 2011 has basically achieved this goal". 

The "1,000 cars for each of 10 cities" program was started in January, 2009, planning to introduce 1,000 units of new-energy cars in each of 10 cities every year as a demonstrative operation, putting around 10,000 units of new-energy car on the road per annum. "But if we compare it to the planned goal of total quantity of 50,000 cars in 25 demonstrative cities in 2011, then we still have a long way to go", said Wang Binggang.

Looking at the usage of new-energy cars in demonstrative cities in 2011, we can find that most cars are used in public areas such as public transportation, postal service, electric power, taxi, and government agencies. Even JAC, who claims that all its cars are sold to private market, the majority of car buyers are JAC employees and those of the power supply bureau. Currently, the purchase and use of new-energy cars are still highly demonstrative in nature.

"China's new-energy car is still in the lead-in stage, with small production volume", said Wang Binggang, who points out that the development of innovative industrial products will all go through the process of preparation stage, lead-in stage, fast growth stage, and mature stage. The end of the lead-in stage is not over until the product reaches a certain scale and is accepted by the market. For new-energy cars, annual production and sales volume of 100,000 is the minimum threshold. About 10,000 in volume in 2011 suggest that China's new-energy cars are still in the initial period of the lead-in stage. Nonetheless, the statuses are different among different products. For example, hybrid-power bus is almost at the end of its lead-in stage, while pure electric vehicles are at the early period of the lead-in stage.

Zhou Anjian, deputy chief engineer of Changan New-energy Automobile, suggests that sales of new-energy cars at present are still small in quantity. For Changan New-energy Automobile, balance between profit and loss can be achieved by sales of at least 10,000 vehicles per annum. 

What is impeding the growth?

Immature technology and scattered and insufficient supporting facilities are important hindrances to the opening of the market.

Mr. Liu lives in the Mentougou District in Beijing. He recently heard that the Beijing Government was about to promulgate policies that encourage private purchase of pure electric vehicles, and buyers can register the car without needing to win the registration lottery. The news excited him, but after visiting numerous cars markets and 4S stores, he could hardly find any trace of pure electric vehicles.

It is a kind of awkward to find no car available in the market, but dealers have their concerns. Many dealers point out that there is hardly any consumer who is interested in buying a new-energy car, not even enquiring for one. High price is the main reason for it. Besides, is it safe? Where can it be recharged? And how far can a charge go? These are all real questions.

In Wang Binggang's opinion, the difficulty in opening the private vehicle market reflects many problems, such as auto companies not being able to produce better products, scattered and insufficient electric vehicles supporting facilities, and immature business models of battery replacement and recharge.

Even in the demonstrative operation markets, new-energy cars are not always available. Many organizations have been placed in the situation not being able to buy any new-energy car when calling for bids.

"Pure electric cars are indeed different from users' expectation", said Zhou Anjian, who points out that technology of pure electric cars is not mature enough at present. Battery and safety are the difficulties faced by the electric automobile industry worldwide. Foreign enterprises are indeed leading, but we are not too far behind. Car manufacturers can supply electric car demand of not more than 1,000 vehicles, but this still lags greatly behind the demand of up to 10,000 vehicles in many cities.

Hybrid power vehicle is a different issue. Zhou Anjian says that currently new-energy cars are made to orders. The whole process from taking of order, to purchasing, and to production would take about 3 months. This would require the buyers to place order in advance. The rather long period sometimes makes it difficult to meet urgent demands. 

Mobilizing the entire industry chain

Two wheels are depended on to promote automotive technology: the first is market demands; and the second is regulations and standards

For the new-energy car industry, there has been plenty of good news since the beginning of the New Year. On January 11, Changan Automobile announced that its pure electric car E30 had completed the first star-rated crash testing of China's electric automobile industry; The Q60FB pure electric sedan of BAIC has been delivered for demonstrative operation in small quantity; Guangzhou Honda suggests that it might become the first joint-venture auto company to start local production of pure electric cars, planning to produce electric vehicles in small quantity by the end of the year. 

Wang Binggang says that the industrialization of new-energy cars would eventually require companies to make investment and the entire new-energy car industrial chain to be mobilized. 
Zhou Anjian suggests that one of Changan New-energy Automobile's important goals in this year is to cultivate auto parts supplier. Many parts suppliers of new-energy cars are high-tech companies that do not belong to the auto industry and industrialization is their weakness. Changan hopes to build up a solid foundation for the future industrialization of new-energy cars as soon as possible.