Ready to get your Tesla on the road in Beijing? Think again

Retired middle school teacher Zhang Heping has given some serious thought to buying her first car. A Beijing resident aged 61, she has decided she wants an electric one. And she has a good cause – protecting the environment.

The deal is financially attractive too. To buy an E150 EV model made by the Beijing Automotive Group, she can benefit from a 95,000 yuan (HK$121,000) government subsidy, which is 40 per cent of the original price. She can also apply for a licence plate almost instantly, unlike those pursuing petrol cars who need to first win a lottery, with the odds of winning being just 0.8 per cent, as the Beijing government is limiting the number of cars on the road to rein in the city’s notorious traffic congestion and air pollution.

But in reality, Zhang soon found herself facing some obstacles.

“Both the limited travel distance and lack of charging infrastructures are my biggest concerns,” she said in a telephone interview with the South China Morning Post.

Most electric cars on sales in China are capable of sustaining a travel distance of between 80 and 300 kilometres. But because there are only a small number of public charging stations designed for private car users, the vehicles’ ranges are really just limited to around 100 kilometres from their homes.

“I will be really glad if distances of electric cars can be enhanced to 400 or 500 kilometres one day, so that at least I can make a round trip from inner city areas to suburban ones,” said Zhang, who has recently bought a new house in a southern Beijing district.

Moreover, she was told by her residential community’s manager that its electricity network could not support the high voltage that is needed to charge electric vehicles.

Zhang’s case is not unusual. About 40 per cent of 300 residents who test drove electric cars last year returned home empty-handed because they couldn't install a charging point at home, according to Electric Beiijng, an semi-official organisation aimed at promoting electric cars.

This is despite a series of measures announced recently by the Beijing and Shanghai governments aiming to promote the electric car.

On Tuesday the governments unveiled a new list of five car models and a vehicle maker that will be subsidised by the government. Approved brands of electric cars are also subsidised by both the central and municipal governments to the tune of up to 108,000 yuan, for electric cars that cost no more than tens of thousands of yuan.

“The government plays a significant role in the EV industry in China,” said Shawn Wu, a manager of Shanghai-based consulting firm SmithStreetSolutions. Apart from the subsidies, “the [government] also provides top-level standards and guidance in terms of key infrastructure and technology,” he added.

Earlier this year, the governments of the two cities also announced an ambitious plan to set up citywide charging networks. State-owned enterprise State Grid said it would set up a total of 6,000 charging facilities in Shanghai within two years, and last month it promised to build 1,000 similar facilities in Beijing available to private car owners, unlike most of the current ones that available only to taxis and buses.

The Beijing government issues 20,000 "new energy vehicle" licence plates each year for buyers of a list of approved electric car models and companies, meaning that every single applicant is able to get a plate right away. In comparison, many conventional car buyers have to wait for years before receiving a plate.

But many car buyers are not keen on the innovative products.

Less than one out of a thousand prospective owners in Beijing is opting for an electric car, figures show. In Shanghai, one of the many pilot cities promoting electric cars and home to 14 million permanent residents, only some 400 residents this year have applied for the plates with electric car subsidies.

“But consumers’ readiness and concerns regarding reliability [of the cars] have deterred most potential customers from buying electric cars,” said Gene Cao, a senior analyst of Forrester Research consultancy.

Wu said the “underdeveloped charging infrastructure and the technology that still has clear room for improvement” are key obstacles that hinder the popularity of electric cars in China.

Overseas electric car makers tapping into the Chinese market have fared no better than the domestic manufacturers.

In January, US electric car maker Tesla announced it would begin selling its Model S saloon in China for 734,000 yuan. “It [China’s market] could be as big as the US market, maybe bigger,” the manufacturer’s CEO, Elon Musk, was cited as saying.

Peng Pei, a 28-year old public servant at a municipal engineering office who lives in Beijing, says the Tesla Model S is her dream car.

“Its design looks so cool,” said Peng who was drawn to its innovative design and cutting-edge technology. “It is definitely an embodiment of the future... a running iPad.” she said.

Peng said she doesn’t worry about the lack of charging infrastructure. With a garage with enough space for charging facility and the vehicle’s 500km range with the car fully charged, she said she was not concerned about the fact that there are no public charging stations for Tesla electric cars.

But Peng still needs to overcome the ultimate obstacle before she can bring home her dream car: winning the lottery for a vehicle plate.

Tesla cars are not eligible for government subsidies or hassle-free licence plates yet, as they are foreign-made. This has left Peng with no choice but to wait until she wins the lottery, which she has had no luck doing for the past two years, before she can place an order for the car.

Other factors influencing potential customers’ decision-making over purchasing the Tesla are cost and the long reservation time.

“The car’s interior design and functionality are not as good as other luxurious cars that are in the same price range,” said Peng, who had a test drive at Tesla’s Beijing office last month. And after an order is placed with a 15,000-yuan down payment, it still takes at least six months before delivery.

“My friends think I am crazy,” Peng said, “None of them is willing to buy an electricity car because they think the industry is not ready yet.”

Wu said it would still take some time before electric vehicles to become a serious competitor against traditional combustion engine vehicles. “The next two to three years will be a key roll-out period for China’s EV infrastructure development,” he said. “China is certainly a promising market with major potential in the coming decades.”