By Alysha Webb
I was in Chongqing, China recently to participate in the China Council for the Promotion of International Trade’s Auto Summit as a panel member on electric vehicles. China has a policy that calls for the country to have 500,000 “new energy vehicles” – which refers to battery electric, plug-in hybrid electric, and hydrogen fuel-cell vehicles – on the road by 2015. By 2020, that number should hit 1 million.
It is falling far short of that goal. In 2013, only 17,642 new-energy vehicles were sold in China, and most of those were likely fleet vehicles. The barriers to EV adoption in China are similar to those in many other countries: High cost, lack of infrastructure, and a technology that many still consider untested.
It is falling far short of that goal. In 2013, only 17,642 new-energy vehicles were sold in China, and most of those were likely fleet vehicles. The barriers to EV adoption in China are similar to those in many other countries: High cost, lack of infrastructure, and a technology that many still consider untested.
Nonetheless, Chinese automakers are being pressured to produce electric vehicles. So, at Auto China, this year held in Beijing in April, most domestic automakers had at least one electric vehicle on show at their stand. Not so at the Chongqing Auto Show, which I visited the day after the summit.
Chongqing is a city in Sichuan province in China’s southwest. Along with a handful of other cities in China, it aspires to be China’s Detroit. Its most well-known automotive manufacturer is Changan Automobile Co., which was known for producing mini-vans. In 2003, it formed a joint venture with Ford Motor Co. That joint venture now produces a portfolio of Ford-badged passenger vehicles, but not yet an electric vehicle.
Changan has in the last few years also begun producing its own line of Changan-badged passenger cars. Those were all on display at the Chongqing Auto Show, which caters to consumers. Indeed, visitors to the show could actually buy a car there. But Changan had no EVs at its stand.
Why? Because consumers in Chongqing -- where the per capita GDP is around US $7,000 compared to Shanghai’s $14,500 – aren’t interested in being environmentally correct when they buy a car. In general they are also not interested in being the first to own new technology. Instead, “they want a car with a lot of power,” Huang Yao, a marketing manager for Shanghai GM’s Chevrolet brand told me.
That illustrates the challenge the Chinese government faces in reaching its EV goal. Inland cities such as Chongqing are where vehicle sales are growing most quickly, but they are also places where consumers have little interest in electric vehicles.
Chongqing is a city in Sichuan province in China’s southwest. Along with a handful of other cities in China, it aspires to be China’s Detroit. Its most well-known automotive manufacturer is Changan Automobile Co., which was known for producing mini-vans. In 2003, it formed a joint venture with Ford Motor Co. That joint venture now produces a portfolio of Ford-badged passenger vehicles, but not yet an electric vehicle.
Changan has in the last few years also begun producing its own line of Changan-badged passenger cars. Those were all on display at the Chongqing Auto Show, which caters to consumers. Indeed, visitors to the show could actually buy a car there. But Changan had no EVs at its stand.
Why? Because consumers in Chongqing -- where the per capita GDP is around US $7,000 compared to Shanghai’s $14,500 – aren’t interested in being environmentally correct when they buy a car. In general they are also not interested in being the first to own new technology. Instead, “they want a car with a lot of power,” Huang Yao, a marketing manager for Shanghai GM’s Chevrolet brand told me.
That illustrates the challenge the Chinese government faces in reaching its EV goal. Inland cities such as Chongqing are where vehicle sales are growing most quickly, but they are also places where consumers have little interest in electric vehicles.
Lineup of EVs SAIC had at Auto China in Shanghai this year by way of contrast
Daimler has a plan
One of the few stands that was showing a battery electric vehicle at the Chongqing show was Zinoro, a brand created by BMW and its Chinese partner Brilliance Automotive Holdings Ltd. specifically for electric vehicles. The Zinoro stand contained the JV’s first battery-electric vehicle, the 1E.
Zinoro has a plan for marketing its electric vehicles that it thinks can overcome consumers’ misgivings about EVs. It revolves around the slogan”worry-free.” The plan starts with leasing – the Zinoro 1E can only be leased. “We have prepared a range of convenient, worry-free services and flexible rental plans tailored to meet urban and individual needs,” says the marketing pamphlet I picked up at the show.
It includes 1, 2, or 3-year rental plans. The EV can also be rented for the day.
Costs are respectively RMB11, 000/month, 9,000/month, 7,400/month, or RMB 400 a day (1 RMB = Rs 9)
A complimentary vehicle license plate is part of the package. In a bid to control growing traffic congestion and pollution, a growing number of China’s cities are limiting the number of license plates they issue each month. Battery-electric vehicles such as the Zinoro E1 are exempt from that limit, however. In other instances, a license plate can cost several hundred thousand RMB, however, and can take months to obtain.
Chinese consumers worry about the maintenance costs of a car with new technology such as an EV. So every Zinoro leasing plan includes a free maintenance package and warranty. “You will be able to keep your Zinoro E1 in optimal condition without incurring additional maintenance costs,” says the pamphlet.
If the car does need to go into the shop, Zinoro provides a free loaner car and in the “rare event” of a breakdown, offers year-round, 24-hour roadside assistance as part of the lease.
China has few public charging spots. And who wouldn’t rather charge at home anyway? So the lease includes a wallbox EV charging unit and free installation (up to RMB 12, 0000). China’s electricity is 220V.
The Zinoro 1E, which is a small SUV-like vehicle, claims a range or 150km per charge. Full charge using the 1.6A wall box takes 7.5 hours.
The leasing package seems to cover most potentially worrisome aspects of driving an electric car. I think it is a brilliant marketing idea and will attract some Chinese customers. Will it be enough to justify the investment on the part of BMW Brilliance? I fear not. But given that they must produce an EV to satisfy China’s central government, I applaud BMW Brilliance for actually putting some marketing muscle behind their BEV, something other automakers have yet to do.
One of the few stands that was showing a battery electric vehicle at the Chongqing show was Zinoro, a brand created by BMW and its Chinese partner Brilliance Automotive Holdings Ltd. specifically for electric vehicles. The Zinoro stand contained the JV’s first battery-electric vehicle, the 1E.
Zinoro has a plan for marketing its electric vehicles that it thinks can overcome consumers’ misgivings about EVs. It revolves around the slogan”worry-free.” The plan starts with leasing – the Zinoro 1E can only be leased. “We have prepared a range of convenient, worry-free services and flexible rental plans tailored to meet urban and individual needs,” says the marketing pamphlet I picked up at the show.
It includes 1, 2, or 3-year rental plans. The EV can also be rented for the day.
Costs are respectively RMB11, 000/month, 9,000/month, 7,400/month, or RMB 400 a day (1 RMB = Rs 9)
A complimentary vehicle license plate is part of the package. In a bid to control growing traffic congestion and pollution, a growing number of China’s cities are limiting the number of license plates they issue each month. Battery-electric vehicles such as the Zinoro E1 are exempt from that limit, however. In other instances, a license plate can cost several hundred thousand RMB, however, and can take months to obtain.
Chinese consumers worry about the maintenance costs of a car with new technology such as an EV. So every Zinoro leasing plan includes a free maintenance package and warranty. “You will be able to keep your Zinoro E1 in optimal condition without incurring additional maintenance costs,” says the pamphlet.
If the car does need to go into the shop, Zinoro provides a free loaner car and in the “rare event” of a breakdown, offers year-round, 24-hour roadside assistance as part of the lease.
China has few public charging spots. And who wouldn’t rather charge at home anyway? So the lease includes a wallbox EV charging unit and free installation (up to RMB 12, 0000). China’s electricity is 220V.
The Zinoro 1E, which is a small SUV-like vehicle, claims a range or 150km per charge. Full charge using the 1.6A wall box takes 7.5 hours.
The leasing package seems to cover most potentially worrisome aspects of driving an electric car. I think it is a brilliant marketing idea and will attract some Chinese customers. Will it be enough to justify the investment on the part of BMW Brilliance? I fear not. But given that they must produce an EV to satisfy China’s central government, I applaud BMW Brilliance for actually putting some marketing muscle behind their BEV, something other automakers have yet to do.
Leasing EV's in India
Firstly Indian vehicle manufacturers need to bring out more EV's into the Indian market. This will increase the consumer confidence slightly. Then the government needs to act fast and start issuing subsidies to make EV's more attractive. But the big problem is that India’s subsidy bill rose fivefold in the past decade under the previous government rule to 2.6 trillion rupees ($43 billion) in the year ending March 31.
“India cannot afford populist policies and needs fiscal discipline for sustainable economic growth” said Finance Minister Mr Arun Jaitley said ahead of budget next week.
So assuming there wont be anything for the EV industry, Indian EV manufacturers will need to innovate and try leasing plans like the ones provided by BMW Brilliance. Time will tell.
Firstly Indian vehicle manufacturers need to bring out more EV's into the Indian market. This will increase the consumer confidence slightly. Then the government needs to act fast and start issuing subsidies to make EV's more attractive. But the big problem is that India’s subsidy bill rose fivefold in the past decade under the previous government rule to 2.6 trillion rupees ($43 billion) in the year ending March 31.
“India cannot afford populist policies and needs fiscal discipline for sustainable economic growth” said Finance Minister Mr Arun Jaitley said ahead of budget next week.
So assuming there wont be anything for the EV industry, Indian EV manufacturers will need to innovate and try leasing plans like the ones provided by BMW Brilliance. Time will tell.