Snubbed by Beijing, conventional hybrids are coming anyway

SHANGHAI -- China's government has no plan to extend its subsidies for electric vehicles and plug-in hybrids to conventional hybrids such as the Toyota Prius.But automakers haven't gotten the message. Judging from product plans disclosed last week during the Guangzhou auto show, automakers plan to introduce a wave of conventional hybrids.At the auto show, Toyota Motor Corp. launched conventional hybrid versions of the Corolla and Levin -- both built in China.The hybrid Corolla is built by Toyota's partnership with China FAW Group Corp., while the hybrid Levin is assembled by Toyota's joint venture with Guangzhou Automobile Co. The batteries, electric motors, power control units and 1.8-liter gasoline engines are built at a Toyota plant in the east China city of Changshu.Local production enables Toyota to avoid paying a 25 percent tariff, so these vehicles will have an attractive price tag of 139,800 yuan ($21,880). By contrast, the imported Prius starts at 229,800 yuan ($35,970). Toyota also sells six imported Lexus hybrid models in China. Toyota did not indicate how many hybrids it sells in China. But it expects deliveries to increase tenfold now that the hybrid Corolla and Levin are produced locally.Toyota is not the only automaker keen to sell conventional hybrids in China. At the Guangzhou show, Zhejiang Geely Holding Group Co. announced an ambitious plan to boost sales of EVs and hybrids.Geely, which also owns Volvo Car Corp., expects its expanded lineup of EVs, plug-in hybrids and conventional hybrids to generate more than 90 percent of its annual sales by 2020. And hybrids will play a big role. Five years from now, the company expects conventional and plug-in hybrids will account for 65 percent of its "green" vehicle sales.The Chinese automaker says it has developed a conventional hybrid powertrain for its subcompact and compact vehicles. The first model will enter mass production next year, Geely said.At the auto show, Hyundai Motor Co. and affiliate Kia Motors launched locally built conventional hybrid variants of the Hyundai Sonata and Kia K5. Those models will go on sale in China in the first three months of 2016.Automakers are rolling out conventional hybrids to meet China's increasingly strict fuel economy target. Beijing requires automakers to cut their fleetwide fuel consumption to 6.9 liters per 100 kilometers (34 mpg) this year, and to 5.0 liters (47 mpg) in 2020. Without subsidies, conventional hybrids are unlikely to match the explosive growth rate enjoyed by EVs and plug-in hybrids. In the first 10 months of the year, deliveries of EVs and plug-in hybrids have nearly tripled to 171,145 vehicles.But Beijing plans to phase out subsidies for EVs and plug-in hybrids over the next five years, and that will level the playing field. Conventional hybrids have one major advantage: They don't require battery-charging stations. Last week, the government released a blueprint for the construction of battery charging facilities for EVs and plug-in hybrids. Yet it will take years for an extensive battery charging network to be put in place across the country.As China's tougher fuel economy standards loom, automakers appear eager to introduce conventional hybrids -- with or without subsidies.Pictured: Yang Jian is managing editor of Automotive News China.

Snubbed by Beijing, conventional hybrids are coming anyway

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