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In smog-choked China, drivers check out electric cars
December 10, 2015 / 2:58 AM / in 2 years

In smog-choked China, drivers check out electric cars

BEIJING (Reuters) - The heavy smog shrouding Beijing this week has proved to be a boon for China’s nascent electric car market, with some dealers saying inquiries about all-electric models are up by almost a tenth.

A Roewe E50 electric car is parked next to a street as a bicycle travels past, amid heavy smog, after the city issued its first ever "red alert" for air pollution in Beijing, China, December 9, 2015. Picture taken December 9, 2015. REUTERS/Damir Sagolj

Beijing issued a first 3-day pollution “red alert” on Monday, and set out measures to combat the hazardous smog, including limiting the use of conventional petrol-powered and hybrid cars to alternate days.

But all-electric vehicles are free to drive in the capital at any time. And that’s prompted a rush of inquiries from would-be buyers, dealers and automakers say.

“I‘m considering (an electric car) as the new policy means electric cars aren’t limited from driving on heavy pollution days while other types are,” said Wang Chao, 26, sizing up electric vehicles at a BYD Co Ltd (1211.HK) (002594.SZ) dealership on Wednesday.

Wang, who runs a Beijing food wholesale business, said the driving restrictions were yet another reason to think electric, noting the attraction also of government subsidies that would save him around 100,000 yuan ($15,560) on a new electric model.

Those subsidies and other government measures have helped pure-electric car sales soar nearly five-fold to 113,810 nationwide in the first 10 months of the year, putting China on track to overtake the United States as the largest market for electric cars this year.

Automakers including Tesla Motors (TSLA.O) and Beijing Automotive Group’s [BEJINS.UL] electric car subsidiary say they have seen an uptick in potential buyers asking about pure electric cars in Beijing because of the pollution - though many don’t dare leave home to do so.

“Recently, the smog is so serious that people aren’t willing to go outside, so they call us to ask,” said Li Hui, owner of several BYD dealerships, which focus on environmentally friendly cars. He said inquiries about the firm’s e6 pure electric model were up by 8-9 percent.

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A "mist cannon" works alongside a street on a smoggy day in Changsha, Hunan province, China, December 8, 2015. Picture taken December 8, 2015. REUTERS/Stringer

BYD, backed by Warren Buffett’s Berkshire Hathaway (BRKa.N), is also playing off the smog in its advertising. Posters on social media for the e6 carry a promotion offering free pollution masks for anyone visiting one of Li’s dealerships.

“Evil pollution invades, and you don’t have a monkey king?” reads another advertisement on BYD’s official microblog, showing a man in a cloud of pollution calling for help from China’s fabled Monkey King hero.

“Activate the green cleaning (system), make PM2.5 vanish in a puff of smoke,” the ad continues, referring to particulate matter that forms the smog. It goes on to say the car’s purifying system can “say goodbye to big city pollution”.

Yang Lei, marketing manager at Beijing Electric Vehicle Co, whose backers include BAIC Motor (1958.HK) and the city government, said staff worked with marketing agencies on Sunday, when Beijing was under an ‘orange alert’, on how to promote sales of its electric cars tied to the pollution.

Drivers opting to leave their petrol-powered cars at home were offered free chauffeur-driven rides in the company’s electric cars on Monday through Wednesday, Yang said.

Automakers said it was too early to say if the increase in inquiries would translate into actual sales.

Dong Yang, head of China’s automakers association, said on Thursday that sales of electric vehicles cannot maintain their current strong growth, and he predicted that pace of growth will slow next year.

Even if drivers switch to electric vehicles, it may not alleviate the pollution threat - assuming the cars are recharged using electricity generated by coal-burning power plants.

A recent study by Carnegie Mellon University found that a shift to electric cars in China might cause more air pollution because of the nation’s emissions-intensive electricity grid.

Coal is responsible for around 75 percent of power generation in China, though the government has said it would cut power sector emissions by 60 percent by 2020.

Reporting by Jake Spring, with additional reporting by Beijing newsroom and Winni Zhou; Editing by Ian Geoghegan

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