SHANGHAI -- While overall new-vehicle sales have rebounded three straight months, China’s electric vehicle market has contracted nonstop following a cut in subsidies in June 2019.
Last month, EV deliveries across the country plunged 38 percent to some 82,000.
To jump-start EV demand, the Chinese government this month came up with two proposals: promote battery swaps and encourage automakers to market EVs to rural residents.
Neither of the plans is expected to generate meaningful results any time soon.
The Ministry of Industry and Information Technology regulates China’s auto and industrial sectors.
Last week, Vice Minister Xin Guobin said at a press conference in Beijing that the ministry will work with other government agencies to promote battery swaps by unifying related technical standards and drafting policies to encourage construction of battery-swap stations.
Battery swaps can effectively address the problem of range anxiety and high vehicle prices, two major impediments facing the popularization of EVs, he noted.
That may be true, but it is easier said than done.
Battery charging technologies vary from company to company and they are evolving rapidly.
It will be a complex and time-consuming process for Chinese regulators to hammer out a whole set of technical standards for various battery charging technologies adopted by EV makers.
As of June, only 449 battery-swap stations had been built in China, according to the ministry.
To help ease range anxiety among EV drivers, a large number of such facilities, each of which requires an upfront investment of several million yuan, needs to be constructed in the country. That again will take time.
Xin’s ministry and two other agencies – the Ministry of Agriculture and Ministry of Commerce – last week convened about 20 domestic automakers for an EV show in the port city of Qingdao in east China.
The event was the first of several road shows the government plans to organize for EV manufacturers across rural China.
The idea is to encourage rural residents to switch from low-speed EVs to EVs with a regular speed.
Will the idea work? It will probably work in the future, but not this time around.
Low-speed EVs, equipped with acid lead batteries, are typically priced below 10,000 yuan ($1,429) in China.
By contrast, EVs displayed at the show were lithium ion battery-powered compact and subcompact vehicles and priced from 50,000 yuan to 100,000 yuan after government subsidies.
China’s rural populations, affected by the coronavirus outbreak earlier this year, have seen their per capita disposable income decline for the first time in decades, according to official statistics.
With falling household income, few rural families can be expected to increase
outlays for a new vehicle.
It was no surprise that on the day the EV show was staged in Qingdao, Chinese social media was abuzz with comments questioning the wisdom of organizing such an event.
“Whenever the economy is doing badly, the government would think of poor farmers, but do they have the money,” one commenter wrote. “At such a bad time, why should one give up an 8,000-yuan vehicle for something that costs more than 50,000 yuan,” another person posted.
Beijing’s intentions to boost EV sales may be sincere, but technical hurdles, time and harsh economic realities stand in the way for now.