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Wally Edgar Chevrolet-Detroit Chevrolet Dealers-The great Chinese electric vehicle campaign

When Chinese leaders envision an epic breakthrough to transform society and promote public health and safety, their favorite tool is a campaign.

May 25, 2011 - PRLog -- Mobilize massive numbers of people, fly banners high and offer the promise of security and prosperity for all.
One example that comes to mind is the Great Wall of China, which protected China from the Mongols to the north. The Great Leap Forward sought to make China the global leader in steel production by encouraging peasants to melt down their pots, pans, rakes and hoes in backyard furnaces.
More recently, the Three Gorges Dam project was launched to provide hydroelectric power to southern China.
The latest campaign is to make China the world leader in electric vehicles and reduce the country's dependence on oil and protect the environment. Beijing will invest $15 billion (97 billion yuan) over the next decade to ignite the transformation.

As a payoff, officials expect to have five million alternative energy vehicles -- including plug-in hybrids and electric cars -- on the road by 2020.
Strategic planners aim to bypass conventional Prius-style hybrids. They prefer to encourage plug-ins and pure EVs because they believe that would give China the upper hand in technology. Once such a mighty campaign is launched, it is politically expedient to be seen as a fervent supporter.
By the end of 2010, 54 auto companies in China had registered 190 alternative-energy vehicles in the government's official product catalogue. Last month's Shanghai Auto Show was peppered with them.
Viewed from afar, Chinese campaigns can appear awesome in strength and numbers. Up close, they look more like organized chaos, with lots of frenzied activity as companies scramble for government subsidies.
There is also an air of high anxiety. Where will the batteries come from? What about standards? Who will build the cars - and who will buy them? Is anyone in charge?
The market is offering a reality check. Last year, China built just 7,800 alternative energy vehicles, of which pure electrics were a small fraction. Most Chinese car executives privately confess to doubts about China's ambitious EV targets.

Enter Wang Chuanfu, Chairman of BYD, with a completely different view. He believes that China is perfectly positioned for an explosion in electric car demand.
At a recent investor conference, he invited listeners to imagine the day when his BYD e6 electric car will populate taxi fleets from Shenzhen to Beijing to Chengdu. That's almost 200,000 cars right there, he points out. And there are dozens of more large cities with tens of thousands of taxis.
There's just one problem with Wang's narrative -- and it's big enough to stop this campaign in its tracks: The jury is still out as to whether the current generation of electric vehicles can handle the long hours and high mileage of taxi work.

Dan Sperling, an expert on electrics at the University of California-Davis, cautions: "In some ways, taxis are not a good app for [electrics], because of their short range. They will need to have batteries swapped or will need to be fast charged (400+ volts) to be used for extended periods."
Chronic stop-and-go traffic - think Beijing - is especially hard on EV batteries. And what about the charging stations?

Can Chinese utilities produce enough electricity in regions that today regularly experience brownouts?
Until someone builds a cheaper, longer-range battery, it may all just be wishful thinking.
Five years from now, China's zealous drive for electrics is bound to produce some effect. But what will that effect be?
Based on the challenges that electric vehicles face today, will we compare the EV campaign with the formidable Great Wall, or the star-crossed Great Leap Forward?

COMMENTARY  Michael Dunne
Michael Dunne is president of Dunne & Co., a Hong Kong-based investment advisory firm. He authored the book, "American Wheels, Chinese Roads: The Story of General Motors in China,"which will be published in June by John Wiley & Sons.

Source: Auto News China

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