Efforts stepped up in a bid to hit unchanged targets

China is determined to fulfill its new-energy auto ambitions, according to senior government officials.

"The national campaign of developing energy-saving and new-energy vehicles will remain unchanged and so will the priority for electric vehicles, the target of their development and the government's favorable policies," said Minister of Science and Technology Wan Gang. 

Wan said the country's current industrial standards can meet the demand for electric vehicles production and that another 100 standards will be formulated and released in the next two years.

Wan made the remarks at the founding ceremony of an organization dedicated to promoting the development of electric vehicles on May 5.

The China Electric Vehicle Council has 100 members including auto experts and representatives from the power, Internet and telecom industries as well as government officials who appear in private roles. The council was established at the suggestion of former vice-premier Li Lanqing.

"Strictly speaking, it is a non-governmental organization. The most important function is to serve as a platform where members from different industries can discuss topics related to electric vehicles and come up with relevant research results," said Wang Binggang, head of an organization under the Ministry of Science and Technology that supervises major electric vehicle programs, in an interview with the 21st Century Business Herald.

"It will have influences on the government but it is not a government department," said Wang.

The organization was established in response to the belief that China would not achieve its goal of producing and selling 500,000 new-energy vehicles by 2015.

Statistics from the China Association of Automobile Manufacturers show that China produced 17,533 new-energy vehicles in 2013 and sold 17,642 in the year.

Despite a 30-plus percent growth from 2012, new-energy vehicles manufactured and sold in the two years totaled less than 60,000. In other words, China has to roll out and sell another 440,000 such vehicles in 2014 and 2015 to fulfill the planned target.

As a result local governments are being urged to step up their efforts.

"Some local governments still do not have a clear understanding and are adopting a wait-and-see attitude," Vice-Premier Ma Kai said when he chaired a meeting to promote new-energy vehicles in Shenzhen in late March, according to the Chinese Business Herald.

The report said Ma pointed out the problems hindering the sector's development, including inadequate charging facilities, protectionism and lack of a proper profit model.

Positive signs

Cities including Guangzhou have followed the examples of Beijing and Shanghai by setting themselves goals for the number of new-energy vehicles on their streets in the next two years.

The charging network is also expanding. One of the State Grid's latest moves was to build charging stations along the expressway from Beijing to Hunan in Central China, according to the Changjiang Daily.

The Beijing government plans to complete construction of 1,000 public fast-charging poles by the end of the year, covering both downtown areas and suburbs.

Shanghai Mayor Yang Xiong promised that his government would offer 3,000 free license plates each year to imported pure electric vehicles when he met Tesla CEO Elon Musk in April.

If it goes ahead the deal would be the first favorable policy nationwide for imported electric vehicles. License plates for gasoline vehicles in Shanghai are auctioned and brought in up to 70,000 yuan ($11,475)last month.

Tesla's entry into the Chinese market is a double-bladed sword, said Minister of Science and Technology Wan at the founding ceremony of the electric vehicle council.

He said Tesla is a competitor for Chinese brands but also gives them the impetus to grasp opportunities to develop electric vehicles.

Also using Tesla as an example, Minister of Industry and Information Technology Miao Wei, said that the Chinese auto industry should think about innovation in business models in addition to technological innovation.

Despite China's enthusiasm for pure electric vehicles many automakers feel hybrid models will be more popular for several years to come.

Evidence of this is that most of the 79 new-energy models unveiled at the Beijing Auto Show were hybrids.

Hybrids will be the focus for Volkswagen in the Chinese market in the next 10 years due to undeveloped battery technology, said President of Volkswagen Group China Jochem Heizmann in an interview with news portal Tencent.com in November.

Winfried Vahland, chairman of Skoda Auto, agreed. He said he expected breakthroughs in battery technology in the years to come.

"In 10 years, the battery capacity will increase 2.5 to 3 times to extend a one-charge travel distance to 300 to 400 km. At that time, the battery cost will also be reduced by 50 percent. That's the time for wide use of pure electrics," he told China Daily in an earlier interview.