China's 16 centrally-managed State-owned Enterprises (SOEs) has recently formed an association to assist development of electric cars.
The association, under direct control and guidance of the State-owned Assets Supervision and Administration Commission, will coordinate activities of companies along the upstream and downstream industrial chain and try to avoid overlapping efforts in developing China's electric autos.
The association aims to integrate technological standards and to help Chinese companies master key technologies in making electric vehicles. Car manufacturers China FAW Group, the Dongfeng Motor Corporation and Chongqing Changan Automobile Co, also known as Chana Auto, have joined the association. Dongfeng has also announced that it plans to invest $440 million into programs to help commercialize fuel-efficient powertrains, set up demonstrations and support infrastructure for hybrid and electric vehicles.
Source: Chana Auto Group
In addition, oil companies such as the China National Petroleum Corporation, the China Petroleum & Chemical Corporation, and the China National Offshore Oil Corporation will also join the association because they will help build recharging stations, according to China Business News. Reporting the move, the Shanghai Securities News did not provide a complete list of all these companies invited to join but said the rechargeable batteries maker, the BYD Company Limited, was not included.
Big new investment
In another major announcement, China may invest more than 100 billion yuan ($15 billion) in alternative-energy vehicles during the next 10 years to boost the industry.
The spending is included in a draft plan for 2011 to 2020 that the Ministry of Industry and Information Technology may submit this month to the State Council for approval, after seeking feedback from other ministries, the newspaper reported today, without saying where it got the information.
"The scheme appears to be a very concrete and detailed one," Yu Bing, an auto analyst at Ping An Securities Co, said by phone from Shanghai. "We expect more supporting policies including subsidies, tax breaks and preferential loans will come out afterward. The move will attract consumers for green vehicles and boost sales."
Automakers such as Toyota Motor Corp, General Motors Co, Fiat Group and BYD Co, which formed an electric car joint venture with Daimler earlier in the year, will increase output of alternative energy-powered vehicles to meet demand in China, the world's biggest auto market. China already subsidizes purchases of energy-efficient cars to help cut emissions, potentially increasing sales of the vehicles by more than 400 billion yuan, according to the government.
China intends to become the world's largest market for renewable-energy vehicles by 2020, according to today's Shanghai Securities News report. The industry ministry didn't immediately reply to a fax seeking comment on the report. The state may subsidize purchases of at least 4 million energy-efficient vehicles by 2012, according to the National Development and Reform Commission. Since June, on a trial basis, China is also providing 50,000 yuan toward the purchase of plug-in hybrid models and up to 60,000 yuan in Shanghai, Changchun, Shenzhen, Hangzhou and Hefei for vehicles that run only on batteries.
China became the world's biggest auto market in 2009 and it aims to increase annual production capacity of alternative-energy vehicles to 500,000 by 2011 as part of efforts to cut oil imports and rein in local pollution, though, with all those coal fired power stations being installed, there is an issue with the effect on global pollution.
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