In China, the early bird drives an electric car – but will it catch on for the rest?
Chinese authorities should look to electric car owners for clues on how to attract other drivers to follow suit
The adage “the early bird catches the worm” is often used to praise those with a pioneering spirit.
Mainlanders who spearheaded the move to own electric vehicles now have a bigger “worm” to catch – by using their experience of driving and owning an electric car to help the authorities draw up a practical and effective strategy to convince other motorists to join them .
Wisley Jin, a Zhejiang entrepreneur who drives a Tesla, attributes his purchase of the luxury electric car to group psychology and is bullish that more wealthy mainlanders will follow his lead to own an alternative-energy vehicle.
“Mainland people are not uncomfortable with being copycats,” he said. “They like to buy the things that others own as long as they prove to be useful and worth the money.”
Topping up his batteries at a “supercharging” facility built by Tesla in Jinqiao, Shanghai, Jin said that it was not just his car’s energy efficiency that gave him a sense of achievement.
“It’s an ideal mode of transport and more charging stations would make it more attractive.”
The Chinese market for electric vehicles failed to take off despite the government’s high ambitions and its generous handout of 37 billion yuan (HK$47 billion) in subsidies for domestically produced models – but not imports like Tesla.
Global management consulting firm McKinsey said the mainland’s electric vehicle industry fell short of expectations and the stalled market could not be rebooted unless the government fostered competition to stimulate innovations.
“Electric vehicles are not just an option for China’s motor industry owing to the country’s worsening pollution issues,” said Paul Gao, a senior partner at McKinsey. “China has to develop a mature electric vehicle market in the next decade to protect the environment.”
China is the world’s biggest emitter of greenhouse gases with total emissions hitting 10 billion tonnes in 2014.
Aside from granting subsidies for purchases of an electric vehicles that could amount to US$17,400 per car, mainland authorities also provide other inducements such a waiving car licence fees, free or reduced parking fees and exemptions on vehicle consumption taxes.
“A typical mindset of electric car owners in China is that they would like to have an additional transportation mode that is fuel-efficient,” said Raymond Tsang, a partner at global consultancy Bain & Co. “They just want to try electric vehicles.”
It is expected that the mainland will need at least 10 years to build good quality electric cars and the infrastructure to support them.
To convince more people to own electric vehicles, the experience of those who already drive them are vital to potential owners.
Steven Wu, a banker in his 30s, said he had been put off owning a Tesla because of “distance anxiety”.
“For a long journey, I’d rather not drive a Tesla because of the lack of adequate charging facilities,” he said. “Tesla are not yet competitive with traditional vehicles in a similar price range.”
China had set a target of 500,000 electric cars by this year and 5 million by 2020, but only 70,000 were on the road last year.
Carlos Ghosn, president and chief executive of Japanese carmaker Nissan, said he was disappointed with the sales of its electric vehicles in China.
“The challenge is to sell the car,” he said, sidestepping the question of how the carmaker would develop new electric vehicle models to attract mainland buyers.
“The electric cars are not taking off in China. But I think it will happen. It will need more concerted action between the central and local governments and car manufacturers to attract more consumers.”
The rising awareness of emission controls among affluent car buyers might be one of the major driving forces.
“I can sense the heavy pollution when I drive in my hometown of Huzhou ,” said Jin. “I would like to drive my Tesla more if charging was not such a headache.”
