China Pouring Resources Into Developing Electric Car Manufacturing By 2011

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Not content with becoming the textile, shoe and toy factory for the world, China is set to become the world leader of electric cars ” if the government gets its way according to the NY Times. At the moment, China produces 2100 electric cars a year, but is investing money, people and energy into raising this to 500,000 by 2011. By that time Japan and South Korea are projected to be producing 1.1 million and the US just 267,000. The Chinese are hoping large scale production and extensive R&D will enable them to drive down the cost of the hugely expensive battery pack and electric motor which currently make up half of the $30,000 price tag of a mid size sedan.

As a sweetener, the government is offering a $8,800 subsidy to taxi fleets and local government agencies in 13 Chinese cities for each hybrid or all-electric vehicle they purchase. It is expected the Chinese will follow the current conventional wisdom and develop lithium-ion phosphate batteries rather than the higher energy but less stable lithium-ion cobalt batteries associated with Sony’s recalls in 2006 and 2008. At least in BYD, the second largest rechargeable battery maker in the world, they already have a global producer capable of taking concept to reality, and willing to throw thousands of engineers at the challenges of longevity and power. BYD has even caught the eye of Warren Buffett who owns 10% of the company.

The electric cars shortcomings of speed and range may not be as much of an issue in China where drivers rarely travel between cities and because of traffic congestion are unlikely to test the cars’ 60mph top speed. To overcome the fact most Chinese live in apartment buildings and therefore cannot plug into their home for recharging, the government has ordered the power utilities to start a building program of public charging points in the three trial cities of Beijing, Shanghai and Tianjin. China’s motivation is not entirely focused on becoming a force in electric car production for exports, Chinese cities are notorious for their pollution and it would seem the government genuinely sees electric cars as part of the solution. Greenhouse gasses will still be generated by coal fired power stations to make the electricity, but at least they will largely be outside the cities and the move would reduce urban pollution. China’s decision to focus on electric vehicles now brings their activities in emerging lithium sources like Bolivia into focus. While the electric vehicle battery is not the only use for lithium it is set to become the most rapidly growing single application.

–Stuart Burns

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