Mainland subsidies ease the jolt of buying an electric car

PUBLISHED : Monday, 18 April, 2011, 12:00am
UPDATED : Monday, 18 April, 2011, 12:00am


Shanghai has announced an additional subsidy for buyers of electric cars in a move to promote the use of environmentally friendly vehicles in its fast-growing car market.

The city will subsidise the purchase of electric-powered cars by 40,000 yuan (HK$47,537). The central government already pays buyers of electric-powered cars a subsidy of 60,000 yuan, and 50,000 yuan for petro-electric hybrids; which means car buyers in Shanghai can save as much as 100,000 yuan if they choose to buy an electric-powered car rather than a conventional, petrol-powered one.

Huang Weifang, an accountant with Shanghai International Automobile City, a city-government backed industrial park, was among the first buyers of an electric car under the new subsidy agreement. With the combined subsidies, she paid just 120,000 yuan for a sedan made by Zhongke Lifan Electric Vehicle, which sells for 220,000 yuan.

Huang said her car, equivalent in power to one powered by a conventional 1.6-litre petrol engine, could save her 13,000 yuan a year in fuel costs. 'Driving on the city's streets, I don't see any difference in power between an electric car and a petrol-powered one,' she told the South China Morning Post. Huang's electric car has a top speed of 100 km/h, and on a full charge its range is an estimated 200 kilometres. The electric cars available on the mainland currently sell for around 200,000 yuan, so the total subsidies account for nearly half the price. BYD, Cherry, Zhongke Lifan and Zotye are the front runners among the domestic car makers in developing cars that have non-fossil-fuel engines.

Beijing rolled out incentives to encourage the use of new-energy cars last year as part of its efforts to develop a low-carbon economy. To date, China has only a few thousand electric cars on the road, but industry officials are bullish on the outlook for the clean-technology vehicles. Last year, car sales on the mainland grew 32.4 per cent from a year earlier to 18.06 million, according to official data from the China Association of Automobile Manufacturers.

The Climate Group, which promotes clean technologies and policies to cut greenhouse gas emissions, said one in every 10 vehicles in China would be electric-powered after 2016. 'The industry is awaiting more preferential policies for the development of the new cars,' said Yu Zhuoping, dean of the College of Automotive Engineering at Shanghai-based Tongji University. 'At present, top-notch domestic manufacturers are taking only a baby step in developing the cars.'

China is still far from commercialising electric vehicles, amid a lack of high-quality products and slow progress in setting up sufficient charging stations to support the potential increase in the number of cars.

According to the Oriental Morning Post, a state-owned newspaper in Shanghai, the city government plans to build 1,000 charging stations this year from the current 100, and the number is expected to hit 25,000 by the end of 2012. Shanghai aims to have 20,000 electric vehicles next year.

The city government was also considering reducing the costs of registration plates for those who buy electric cars, industry officials said. Currently a Shanghai car owner has to pay more than 40,000 yuan to buy a registration plate through an auction system, used by the municipal government to control the number of new cars to avoid traffic gridlock.