SHANGHAI -- A current hot topic among auto executives in China is whether the government should legalize the use of low-speed electric vehicles on roads.
In September, the topic was heatedly debated at the annual meeting of China's Society of Automotive Engineers. And at an industry forum held in Shanghai in October, a speaker from Beijing-based Tsinghua University mentioned the topic but declined to disclose his stance to Automotive News China due to the issue's "sensitivity."
The debate continues: Should low-speed EVs be allowed to drive on roads in China? Well, to me, legalizing low-speed EVs is a bad idea.
In China, low-speed EVs are three- or four-seat vehicles with a maximum speed of about 50 miles per hour. They generally travel up to 37 miles (60 kilometers) before requiring a recharge.
China's central government does not allow these EVs to drive on the roads. But they can be found in rural areas of northern provinces such as Shandong and Henan, where local governments turn a blind eye to their presence.
The local governments protect EV producers because they create jobs and revenue. For example, the Shandong-based Shifeng Group says it will have the capacity to produce as many as 80,000 low-speed EVs annually by the end of this year.
The Wonder Group, a major domestic supplier based in northeast China's Liaoning province, also has started making low-speed EVs. By the end of 2011, the company plans to increase annual output to 100,000 units.
Some EV supporters want to encourage companies like Shifeng and Wonder Group because Chinese automakers still lag behind global EV producers such as Nissan Motor Co. and Mitsubishi Motor Corp.
By permitting low-speed EVs, supporters hope to accelerate formation of an EV industry in China. More important, domestic automakers will get the 'first-to-move' advantage on the home market when competing with global companies.
But can low-speed EVs really accomplish these goals? The answer is they can't.
For electric vehicles, low speed means low technology. Low-speed EVs in China usually are powered by roughly made lead acid batteries. That's why they typically sell for less than 30,000 yuan ($4,480).
True, allowing wider use of low-speed EVs will create a huge demand in China's vast rural area, home to 800 million people. But a large market doesn't necessarily lead to technology advancement.
A look at the bicycle market explains why. China has by far the largest number of cyclists in the world. But locally made bicycles are seen as low-quality products even in China, let alone overseas.
The idea of allowing low-speed EVs on roads smacks of protectionism. And past experience with China's domestic auto industry demonstrates protectionism's pitfalls.
To protect domestic automakers, China forced international automakers to form joint ventures with state-owned companies. As their partnerships delivered comfortable profits, few state-owned auto companies developed their own competitive brands.
By contrast, private Chinese automakers such as Great Wall and Geely -- which were not protected from competition -- moved into upscale markets with models priced above $15,000.
The best way to help domestic companies develop competitive EVs is to expose them to competition. Protectionist measures -- such as legalizing the use of low-speed EVs on roads -- will only do the opposite.