(Corrects name of consultancy IHS Automotive in the 15th
* Shanghai relaxes conditions favouring local e-car makers
* Beijing, Tianjin, Shanghai list cars eligible for
* Government targets 500,000 EVs by 2015 from 50,000 now
By Samuel Shen and Kazunori Takada
SHANGHAI, March 20 Three of China's biggest
cities are helping consumers pay for a range of electric cars,
heeding calls to encourage the sale of green vehicles that the
government sees helping tackle pollution.
China's smoggy skies topped the agenda at the annual
parliamentary session this year, while Premier Li Keqiang in
January demonstrated the importance of green cars by visiting a
factory of BYD Co Ltd , maker of the e6
pure electric car.
The government wants to put 10 times more e-cars on the road
by next year but traffic management is under the remit of local
authorities, and many cities including the polluted capital of
Beijing have not had the framework to deem the vehicles
Tianjin lacked the means to issue licence plate numbers for
e-cars, while in Shanghai, technicalities in traffic management
rules meant only Shanghai-made vehicles were eligible for local
But the cities last month said they would subsidise
purchases of pure electric and plug-in hybrid cars from Chinese
makers including Warren Buffett-backed BYD, SAIC Motor Corp
and Anhui Jianghuai Automobile Group Co Ltd (JAC
Any sales rise will add to a population of 50,000 new energy
vehicles (NEV) - defined in China as electric, plug-in hybrid
and fuel cell - well short of a government target for half a
million by 2015 and 5 million by 2020.
"This is the goal to strive toward, with the numerical
targets putting pressure on car makers," said Luo Xing'an,
secretary general of the Guangdong Automobile Association. "But
there's no guarantee these targets will be met. The foundation
of the industry is not yet solid."
Many other industry executives regard the targets as
impossible, but China could edge closer if more cities broaden
subsidies for which in many instances only locally made cars
have been eligible.
BYD, for instance, sells most of its electric cars in its
home of Shenzhen, where more than 800 taxis are its e6. The city
offers subsidies for NEVs provided they are capable of 300 km
(186 miles) per charge - criterion only the e6 satisfies. That
effectively shuts out cars such as SAIC's Roewe E50 and JAC
Rapid economic growth and urbanisation have turned China
into the world's biggest emitter of greenhouse gases, with
pollution a constant feature in newspapers and a topic widely
discussed in the Chinese blogosphere.
The government has vowed to fight pollution and since 2010
has been encouraging consumers to buy green cars. Under its
latest initiative, it offers to pay up to 60,000 yuan of the
purchase price - an amount local authorities are encouraged to
Shanghai, before last month, only subsidised NEVs satisfying
criteria such as the ability to reach 50 km/hour in 6 seconds,
met only by models from Shanghai-based SAIC and Shanghai Zhongke
Lifan Electric Vehicle Co Ltd.
In Beijing, the inability to obtain licence plates for
e-cars prior to February meant the BAIC E150 of local maker BAIC
Motor Corp Ltd came up against limited competition on its
official release this month.
However, in September the central government said non-local
cars should make up at least 30 percent of a city's NEV sales.
"Shanghai and Beijing are under pressure from the central
government so they're setting an example of easing
restrictions," said Namrita Chow, an analyst at consultancy IHS
In Tianjin, the authorities only opened the market to green
cars in January after BYD agreed to build an electric bus
factory in the city.
"Given the current situation in promoting NEVs, it's
necessary for the company to make some investment when needed in
exchange for access to new markets," BYD said in an emailed
statement to Reuters.
The opening up of city markets is likely to support China's
fledging electric car industry before an inevitable onslaught
from foreign brands, most of which will not be eligible for
Tesla Motors Inc is taking Chinese orders for its
Model S, BMW aims to import its i3 this year, and
Volkswagen AG plans to sell more than 15 models in
China by 2018.
Unlike the luxury cars of Tesla and BMW, Chinese models are
aimed at the lower-priced end of the market. But even with
subsidies, prices are high.
IT engineer Zhang Shuai, 32, paid 240,000 yuan ($38,800) for
a BYD e6 after receiving 114,000 yuan in Beijing and central
government subsidies this month. China's top selling petrol car,
Ford Motor Co's Focus, costs half as much.
"Most of my friends and relatives were opposed to me buying
the e6," said Zhang. "I'm a fan of electric vehicles, but many
people in China are still sceptical."
($1 = 6.1920 Chinese Yuan)
(Editing by Christopher Cushing)