New-energy cars on the right road

PUBLISHED : Tuesday, 29 July, 2014, 5:24am
UPDATED : Tuesday, 29 July, 2014, 9:31am

A downside of the mainland's shift from an industrial to a consumer-driven society has been a flood of polluting private cars. Vehicle exhaust has replaced industrial pollution as the biggest source of smog in major cities. China is the world's leading market for alternative-energy vehicles, but with sales miniscule compared to petrol-driven models, more than the subsidies presently on offer are needed. An order that by 2016, 30 per cent of government purchases must be environmentally friendly sends the right message.

Electric vehicles, plug-in hybrids and fuel-cell cars are covered by Beijing's call to all ministries and agencies. Requirements for the country's 54 biggest cities will be higher than for provincial areas and the threshold will rise after 2016. Coinciding with the announcement was a decision to waive a 10 per cent purchase tax on new-energy vehicles. With subsidies in place that can halve the price of the models and more than five million cars that fail to meet fuel standards being taken off roads, the measures show a seriousness about making the air cleaner and reducing a dependence on oil.

Shifting away from petrol-driven cars requires more than policies; China has a poor record when it comes to monitoring and policing. The state fleet comprises less than 10 per cent of the nation's more than 250 million vehicles, of which only about 50,000 are powered by new-energy sources. Chinese sales are also being outstripped by those in lesser markets, with 17,600 being sold last year compared to 110,000 in the US and 50,000 in Japan. There are a host of reasons for the reticence, among them a high cost despite the subsidies, lack of recharging stations, low mileage range and safety concerns.

The latest five-year plan has ambitious targets for new-energy vehicles. Authorities aim to invest US$15 billion over the next decade, with 500,000 cars planned to be sold next year and one million by 2020. Given the slow take-up by motorists, the challenges are considerable. The government will set the right example, though, by practising what it preaches.