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why china will save the electric car

  1. 6,757 Posts.
    not that it needs saving. Imo it is inevitable...

    "Recession or no recession, Asia's emerging economies will be buying a massive number of automobiles in coming decades. Odds are, the lion's share of them will run at least partially on electricity."


    Why China May Save The Electric Car
    William Pentland, 10.27.08, 3:50 PM ET

    The news wasn't all bad for General Motors on Tuesday.

    Amid talk of bankruptcy and a forced merger with failing Chrysler, GM (nyse: GM - news - people ) introduced a new model of its Chevrolet Equinox in Beijing that runs on hydrogen, making the beleaguered automaker the most recent company to take a big bet on the budding electric vehicle (EV) market in China.

    GM sees China as being among the first markets and production sites for alternative propulsion systems and will continue working to advance its strategy of "in China, with China, for China" to help the country develop diverse automotive energy solutions and commercialize such energy solutions, David S. Chen, vice president of GM China Group, said last week.

    They're not alone. Recession or no recession, Asia's emerging economies will be buying a massive number of automobiles in coming decades. Odds are, the lion's share of them will run at least partially on electricity. At least that's what investors and manufacturers, from GM to Warren Buffett, think.

    In 2006, China had about 160 million motor vehicles. By 2050, it will have nearly 700 million, or almost three times the number of registered vehicles currently in the U.S. If China's vehicle fleet grows to these anticipated sizes with today's fuel efficiency and emissions standards, China will need roughly 20 million barrels of oil per day to fuel its transportation sector, which in turn will emit about 3 billion metric tons of carbon dioxide every year.

    "Considering the rapid depletion of the world's oil reserve, the heightened global interest in addressing greenhouse gas emissions and the geopolitical complications of global oil supply and demand," a report by the U.S. Department of Energy concluded. "The unmanaged vehicle growth and limited improvements in vehicle fuel efficiency will lead to an unsustainable and unstable transportation system in China."

    In early 2007, China launched the so-called "863 Initiative," which initiated multiple electric vehicle research and development projects by universities, research institutes and companies. In August, China said it would begin developing a large-scale demonstration project in 10 or more cities to put at least 1,000 hybrid, fuel-cell and all-electric vehicles on the road in each of those cities and provide the necessary infrastructure for the project. The government is also providing funds for the construction of a nationwide network of charging stations. Before the end of the year, China's government will likely finalize regulations needed to begin large scale EV manufacturing.

    This momentum sparked a surge of investments. MidAmerican Energy Holdings (otcbb: MDPWL.OB - news - people ), a unit of Warren Buffett's Berkshire Hathaway (nyse: BRK - news - people ), bought a 10% stake in Chinese rechargeable battery firm BYD Automotive, a Hong Kong-listed company developing electric-hybrid cars, for $230 million. The company claims to have developed lithium-ion batteries that can provide enough power for an electric car to travel 190 miles on a single charge. A full charge needs nine hours using its lithium-ion batteries, although they could be charged to 80% capacity in 15 minutes.

    Johnson Controls (nyse: JCI - news - people ), the Milwaukee, Wisc.-based industrial conglomerate, and Saft, the Toulouse, France-based energy storage company, have partnered and are working on plans to produce lithium-ion batteries for hybrid cars. Even Exxon-Mobil, the world's largest oil company, recently invested more than $300 million in a battery manufacturing plant in South Korea.

    While speaking at Reuters Global Environment Summit two weeks ago, Alex Molinaroli, president of Johnson Control's battery unit, said he believed China and, to a lesser extent, India would adopt electric cars faster than other countries because of the size and relative lack of reliance on gasoline for transport. "If one in 100 folks around the world end up in electric vehicles, just the sheer numbers say that China and India will have a real place in it," Molinaroli said.

    Meanwhile, multiple firms from South Korea and Japan are also jockeying for position in China's nascent market. In 2009, Mitsubishi Motors (other-otc: MMTOF.PK - news - people ) plans to start selling the i Miev, a small, snub-nosed hatchback that is powered by lithium-ion batteries, bringing it to market a year ahead of rival electric cars from General Motors and Renault-Nissan (nasdaq: NSANY - news - people ). Toyota (nyse: TM - news - people ) has also developed a next-generation all electric vehicle.

    China has hardly conceded the field to foreign car makers. In fact, Chinese EV manufacturers appear keen on exporting electric vehicles to U.S. and European markets. In September, the Italian company IDB Group entered into an agreement with BYD Automotive for IDB to sell and service BYD cars in Italy.
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