Take China's public sector on an electric ride

Lower energy costs will help encourage use by buses and taxis on the mainland while reducing emissions of pollutants

PUBLISHED : Friday, 02 May, 2014, 1:03am
UPDATED : Friday, 02 May, 2014, 2:46am


While lagging battery-charging infrastructure and limited range have been blamed for slow growth in electric-car ownership among private-car owners on the mainland, industry executives and government officials see the public transport sector as the best route to faster commercialisation.

C.C. Chan, founding president of the World Electric Vehicle Association and an academic at the Chinese Academy of Engineering, projected the share of all-electric and plug-in hybrid vehicles on the mainland would rise from 2 per cent between now and 2020 to between 10 and 15 per cent in the following decade.

Until 2020, the key targets would be buses, taxis, logistics vehicles and small utility vehicles, while mass adoption in private cars was not expected until the following decade, he told the China International New Energy Vehicle forum last month.

In an industry policy circular issued in mid-2012, Beijing set a sales target of 500,000 units for all-electric and plug-in hybrid vehicles by 2015, rising to five million units by 2020. Annual output capacity was set at two million units.

"It is a very ambitious target, given that the existing fleet is fewer than 100,000 units," said an analyst covering Shenzhen-based and Hong Kong-listed electric-car maker BYD.

All-electric vehicles can be recharged from any external electricity source, like wall sockets and rechargeable batteries. Hybrid vehicles use petrol or electricity as their power source, supplemented by the other.

Plug-in hybrids, powered primarily by electricity, are cheaper since their battery capacity is smaller, but they emit more roadside emissions. All-electric vehicles are more environmentally friendly but more expensive since the batteries usually account for more than a third of their total cost. They also have a limited mileage range after each recharge, typically just under 200 kilometres.

Dai Dali, general manager of FAW's new energy vehicle unit, said the market for private cars was more difficult to develop than that for buses and taxis because its customer base was geographically spread out so it took much longer to recoup the investment in recharging facilities.

Electric taxis, which typically run about 500 kilometres a day, need to be recharged at least twice a day, with each recharge taking one to two hours at a quick-charge outlet. Electric cars with detachable and swappable battery packs that avoid charging downtime are much less common in the market.

While this may turn taxi drivers off since they need to get to a recharging station before their batteries run out, Dai said this would be made up for by savings in energy costs.

He said the energy cost for electric taxis ranged from 10 fen (12 HK cents) to 12 fen per kilometre, compared with 40 fen for compressed natural gas or liquefied petroleum gas types, and 70 fen for petrol-powered taxis.

"The energy cost difference means a relatively short payback period for investing in the more expensive electric taxis," he said.

Another reason for putting more emphasis on public transport from the policymaking point of view is environmental protection due to the sheer volume of pollutants emitted.

Lu Xiangzhen, director of the new energy vehicle promotion and management authority of Shenzhen, one of the mainland's most developed electric-car markets, said it aimed to have electric vehicles account for half the city's public transport vehicles by the end of next year.

Buses and taxis accounted for 1.1 per cent of Shenzhen's total number of vehicles but were responsible for more than 20 per cent of the pollutant emissions, he said.

He said Shenzhen had 6,650 electric vehicles at the end of February and 81 recharging stations, of which 74 were dedicated to public transport vehicles. The city has about 1,100 quick-charge outlets, mostly at the stations, and close to 3,000 slow-charge ones, mainly at car parks.

BYD assistant to senior vice-president Zhou Jingwei said one petrol taxi emitted as much pollution as 10 petrol private cars on an average day, and emissions from one diesel bus equalled about 30 petrol passenger cars.

"All in all, 60 per cent of a city's vehicular emissions can be avoided [if electric vehicles are used in public transport]," he said, adding that with falling battery costs, electric vehicles were becoming more viable.

Citing data from the Department of Energy in the United States, Zhou said the cost of electric-car batteries had fallen to US$485 per kilowatt-hour in 2012 from US$1,000 in 2008.

The switch to electric buses is easier for drivers since their routes are fixed and regular recharging at bus depots can be scheduled more easily than taxis.

Wang Jun, vice-president of state-backed railway locomotive maker CSR, said the firm had sold more than 4,000 electric and hybrid buses now operating in more than 10 mainland cities. It aims to lift annual sales from 3,000 units this year to 20,000 units by 2020.

Guangdong Development and Reform Commission deputy director Zhang Jun said the provincial government was targeting to have 55,000 electric vehicles in operation by 2015, of which 35,000 would be in Shenzhen, 10,000 in Guangzhou and 10,000 in five other cities.

Shenzhen's target includes 5,000 buses, 2,500 taxis, 16,500 private cars, 10,000 special-purpose vehicles and 1,000 commercial passenger vehicles.

"To meet the target, we will soon launch detailed measures to speed up adoption, and public transport is at the core of the initiative," he said, adding that they included construction of recharging facilities, preferences for electric vehicle procurement by government entities and subsidies.

Addressing concerns over whether the electricity supply could cope with demand from electric vehicles, Shenzhen Grid Corp manager Liang Xiaofeng said Shenzhen's peak power demand would only rise 4.3 per cent if 15,000 BYD e6 taxis were recharging at the same time around noon. This will grow to 7.2 per cent if 5,000 buses also join the recharging at that time.

Shenzhen Grid, the country's fourth-largest municipal power distribution system, saw peak load growth slow to 1.4 per cent last year from 3.9 per cent in 2012 and 8.2 per cent in 2011.

On the national level, Vice-Premier Ma Kai said last month that Beijing was mulling a number of incentives, including waiving the purchase tax for electric and hybrid vehicles, offering cheaper electricity, insurance and toll fees to owners and extending the green-vehicle subsidy programme beyond next year.

The Ministry of Finance renewed the programme in February with subsidies cut by 5 per cent, less than the previously planned 10 per cent. Next year's subsidies will be slashed by 10 per cent instead of 20 per cent as planned.

Ma also said that for electric and hybrid vehicles, local governments should scrap the "directory" system that favoured certain makes bought by them in order to eliminate local protectionism.

Asked how the Guangdong government addressed the issue of protectionism, Zhang said: "We do not have such protectionist inclination, but it is understandable that some local governments face a tough task in balancing their need to develop the local [vehicle] industry and also promoting the adoption of electric vehicles. If there is too much protection, the industry will become uncompetitive, which is not favourable for development of the market either."