Electric Dreams: Can China meet its Electric Vehicles Target?
Chery’s QQ electric vehicle – cute, but will it sell? (Source: EVWorld)
New energy vehicles are one of China’s seven strategic emerging industries. Unlike its other “new energy” counterpart industries, NEVs, and electric vehicles in particular, are still waiting for commercial breakthrough.
China’s clean energy targets are usually just temporary placeholders. Targets for wind and solar power installed have been met, surpassed, and updated numerous times. New research from Bloomberg New Energy Finance (BNEF), however, suggests that China’s 2015 and 2020 targets for electric vehicle (EV) rollout will not be met due to “weak capability throughout the supply chain.” China has become a dominant force globally in wind and solar manufacturing and deployment; their supply chains are capable albeit recently consolidated with wavering demand in an oversupplied market. So why is that EV’s may not find similar success? Read the full story
Green Hops: Autos, Nukes, Agro, Recycling Woes
Energy Price Reforms
NDRC announced that it would be removing price caps on coal from next year in a move towards a more market-driven price mechanism. This move comes at an opportune time when coal prices have dropped by 30 to 40% since the summer, but GLF points out an earlier post (see finding #4) on a recent MIT coal report that suggests the upstream coal industry has already moved towards a de facto market price system. Although the NDRC move “is a step in the right direction,” Huang Shengchu, president of Beijing-based China Coal Information Institute says in this interview that government macro-control is still needed to protect the rights of various coal stakeholdres in their contractual dealings with each other, accerlarate industry consolidation of the many small and inefficient mines and to set up a coal price index.
Separately, the proposed auto fuel price reform kicked in earlier than expected. So it turns out that the answer to our confusion (see earlier post) of how the government proposed to hike up taxes and keep fuel prices even was that they would adjust the base fuel price downward, predicated on Read the full story
Pacific Bridges: Steven Chu and John Holdren May Shape U.S.-China Energy Relations
GLF has been traveling and getting a little caught up on side projects, but let’s play some catchup. Let’s pick things up with two specific appointments by President-elect Obama which have implications for U.S.-China energy relations–one being the 1997 Nobel Prize Laureate Dr. Steve Chu of Lawrence Berkeley Labs (LBL) as the new Secretary of Energy, and the other being Dr. John Holdren, physicist and energy technology policy professor at Harvard and Director of the Woods Hole Research Center (whom yours truly had the pleasure of meeting in the copy room as a policy intern there way back in 2003) as the White House science & technology adviser.
Besides being a director of LBL, Dr. Chu (pictured right) is also a professor of physics and molecular and cell biology at Read the full story
David Tyfield [Part 1 of 2]: Low Carbon Innovation in China
Dr. David Tyfield (pictured right) of Lancaster University in the UK is a critical realist of science and innovation policy. Cross-trained in molecular cell biology, philosophy of social sciences and the law, Dr. Tyfield brings an interdisciplinary approach to analyzing current trends in international collaboration in low carbon innovation. The Green Leap Forward had the opportunity to interview Dr. Tyfield before a live audience of about forty attendees at an event hosted by the Beijing Energy Network on October 29 in Beijing. This the first of two posts summarizing the hour long interview, with this first post focused on questions posed by The Green Leap Forward, and the second summarizing the Q&A session that was opened to the audience.
The Green Leap Forward (GLF): Here at The Green Leap Forward, we’ve previously talked about the need to look at innovation beyond just the technological, calling for disruptive systems over mere disruptive technologies. You similarly have an expansive view of “technology” and “innovation” beyond the way the media narrowly construes it. How would you define these terms?
David Tyfield (DT): I don’t think its just the media, but its the main thinking behind a lot of policy. We would want to distinguish between technology and innovation, where technology is just new kinds of machines. Innovation on the other hand is a much bigger issue than that and its not just the technical issue of introducing new machines. My background is in looking at science and innovation from a sociological political economic angle, which means we treat innovation as a social process. that means innovation is not just a question of great minds coming up with great ideas, not is it just about R&D spending. Its a much bigger process. In fact, a lot of important innovation does not involve technology at all. They can be social innovation, the kinds of processes or new kinds of organizational forms. For instance, the joint-stock company or limited liability company is a form of innovation.
Another important issue that we are interested about innovation is that once we start looking at it as a social process then we can start to recognize that there are many different possible trajectories of technological change, therefore there is also a question of choice between them. So there is a question of direction, and not just a question of how much innovation is happening but in which direction. And that opens up, in effect, all kinds of important political decisions that can be easily swept under the carpet.
In terms of the implications for low carbon innovation, this is very important. Because if we just limit our our consideration of innovation for low carbon to high technology, not only are we setting ourselves for some pretty difficult tasks, we also exclude ourselves from all sorts of other possibilities which could have profound influence on a shift to a low carbon system. In terms of what we mean by low carbon definition, therefore, the “low carbon” bit does not just refer to more efficient use of greenhouse gases. Its actually about any kind of innovation in this broader definition which contributes to a shift in social system that actually has, altogether, a lower carbon consumption. Read the full story
Green Hops: Walmart, Geely, Smart Grid
Climate Social Responsibility. At its firs global supply-chain summit in Beijing, Walmart, the world’s largest retailer, launched an ambitious program dubbed the “Global Sourcing Responsibility Initiative” that will require its Chinese suppliers (which may number up to 20,000 according to China Daily) to abide to potentially costly energy efficiency targets, to be verified by third party audits, among other environmental and social goals. The program will be expanded worldwide by 2011.
A new report by the Carbon Disclosure Project suggests that major Chinese companies lag far behind their foreign counterparts in carbon-risk awareness and carbon reporting. But China Mobile (the world’s biggest wireless operator with 420 million subscribers), Broad Air Conditioning (the world’s leading manufacturer of low-energy air-conditioning units) and Suntech (the world’s third largest solar energy company) are not among these companies as they have just joined the Climate Group’s global climate coalition. As members to this coalition, the three companies will make ambitious emissions reduction commitments beyond what is currently required by law. China Mobile, for instance, has set itself the target of reducing its energy intensity by 40%, double the national target, reports The Guardian.
Auto & Transportation. Geely, China’s first independent auto maker, is looking to follow BYD Auto’s footsteps to export its electric vehicles (EV) technology. Read the full story
BYD Auto Hits the Buffet Line
Legendary investor Warren Buffet has had a busy, busy, busy week. (That’s one “busy” for each of the high profile deals he has made and he certainly deserves to take a seat after that, as pictured, if even for a brief moment.)
In the midst of a financial meltdown in Wall Street, Buffet’s Berkshire Hathaway made bold investments in Goldman Sachs, Constellation Energy (which has a nuclear energy storyline) and now BYD Auto, the Shenzhen-based maker of batteries and electric vehicles that this blog has profiled a few times. From Green Car Congress:
MidAmerican Energy Holdings Company, a Berkshire Hathaway Inc. subsidiary, will purchase 225 million shares, representing approximately a 10% interest, in China-based BYD Company Limited. BYD’s corporate focus is researching, developing, manufacturing and selling rechargeable batteries (Li-ion, Nickel batteries), automobiles, electric automobiles and related products. The investment is valued at 1.8 billion HK dollars, or approximately US$230 million. Read the full story
Green Hops: Cleantech Roundup
Cleantech news has been slow on The Green Leap Forward lately, so we play catchup on recent developments in the sector over the past two months…
Efficiency is King. Energy efficiency continues to be the clean energy policy priority of Beijing. New regulations governing energy efficiency in civil construction projects are on the cards, reports Cleantech. Meanwhile, the almighty National Development and Reform Commission (发改委) has announced optimistic news that 879 of 953 enterprises that had pledged to reduce energy consumption had fulfilled their goals last year. These do not include certain companies in Guizhou, apparently. Separately, China Recycling Energy Corp. (CREG) has been awarded a contract to recycle waste gas and waste heat into electricity (7MW capacity) for China Zhonggang Binhai Enterprise Ltd., a nickel-iron manufacturing joint venture between China Zhonggang Group and Boasteel Group at a facility in Cangzhou City, China, reports Renewable Energy World.
Windy and Made in China. Local wind parts manufacturers continue to benefit from China’s wind development policies, as this highly recommended in-depth article by Lou Scwhartz and Ryan Hodem discusses. This trend will also benefit the likes of HLS Systems International (China), an automation controls specialist that is seeking to diversify into clean tech by offering its automation control solutions to wind systems and is in talks with some of China’s largest wind turbine producers, as well as China Wind Systems (see also here). On the development front, Inner Mongolia is set to add some 300 to 1,000 MW of wind installations by 2010 to 2011, courtesy of China Power, Inc.
Supersize Solar. China Solar Energy Blog keeps track of the latest developments in pilot solar power plants in Beijing (10 MW, courtesy of NYSE-listed Yingli Green Energy) Shanghai (1 MW and the biggest already in operation), Ningxia (330 kw, courtesy of Ningxia Power Group) and Shilin (66 MW, courtesy of Yunnan Power Investment New Energy Development Co., Ltd. and the largest plant in China planned). Across the straits, Taiwan might become host of the first concentrating solar power (CSP) plant in Asia, while Taiwanese solar panel makers are seeing the cash roll in. The significance of these announcements are that these are some of the first announcements of power plant-scale solar projects in China, where there has been at the end of 2007 an installed capacity of only 0.08 GW of solar compared to nearly 6 GW of wind.
Get on the Bus. Xiamen’s Bus Rapid Transit system, also China’s first elevated BRT system, came into operation, reports People’s Daily. Incidentally, today (Sept 22) was supposed to be National Car Free Day. The Green Leap Forward frankly didn’t even notice.
Electric Dreams. A pilot network of electric charging stations will be built in Beijing, Shanghai and Tianjin so as to accelerate the uptake of electric vehicles (EV), says the State Grid Corporation, according to China Daily. Each charging station is estimated to cost between 250,000 yuan ($36,550) and 300,000 yuan ($43,860) to construct. China Daily mentions BYD Auto (see also previous post “Electric Dreams—BYD Auto Brings Electric Cars to Israel”), Dongfeng Motor, Chery Auto, Changan Auto, Wanxiang Group and Tianjin Qingyuan Electric Vehicle as domestic cars and parts makers that are investing money into EV research and development. GreenCarCongress reports that China is shaping up to be the a leading R&D center for lithium-ion batteries, a necessary component of an EV system. Australia is chipping in as well.
Water and the Paradox that is Ningxia. Ningxia Autonomous Region, located in arid Western China, has had its economy hampered by water shortages, as the article in Beijing Review accounts. So it is welcome news that Ningxia, also a coal-rich region, will be the beneficiary of China’s first million-kw air-cooling systems in ultra-supercritical coal-fired power plants. Ultra super-critical thermal generation relies on very high pressures and temperatures to achieve greater efficiency of fuel use, while air-cooling (instead of water-cooling) replaces the need for water. Yet, news that coal-to-liquids (CTL) projects in Ningxia will go ahead after most of the other CTL projects nationwide have been halted has The Green Leap Forward shaking its head. The CTL process, after all, consumes large amounts of water. This blog will take a closer look into CTL in an upcoming post. In other water news, Hebei’s role as water backstop for Beijing (see previous post “Chinese Water Torture”) has been activated, while Inner Mongolia gets a new wastewater treatment plant.
LNG, CLP and Tale of Two Cities. Hong Kong-based China Light & Power has been in the news lately with its plans to make investments in liquefied natural gas (LNG) terminals. While the Hong Kong government voted against it’s LNG terminal plans in Hong Kong due to ecological reasons, CPL seems to have turned its attention to neighboring Guangdong province, reports Financial Times. Climate thug ExxonMobil is reported as possible investor in the Guangdong project. A classic environmental “race-to-the-bottom”?
GE Feeling at Home in China. As part of its China green energy business plan, General Electric is seeking to make China its second home while it expands its presence into five new locations. It currently has offices in Shanghai and Beijing but will add offices in the provincial capitals of Shenyang, Wuhan, Chengdu, Xi’an and Guangzhou.
Green Taxes. The Beijing authorities have indicated that new environmental taxes to curb pollution are in the offing. Xinhua reports that Pan Yue, the deputy minister of environmental protection, has revealed that an inter-ministerial team of officials together with experts have been convened to “come up with a research paper on environmental taxes.” This is likely the green taxation component of the Green Whirlwind policies that this blog reported earlier this year.
Electric Dreams--BYD Auto Brings Electric Cars to Israel
Earlier this spring this blog identified an upstart Chinese auto company called BYD Auto that is, despite is short operating history in the auto industry, introducing one of the most innovative automobile makes in the industry—a fully commercial electric car—ahead the likes of established auto giants like General Motors (and its flagship electric car make—the Chevy Volt). It was reported earlier this month that BYD Auto will start selling its fully electric E6 and plug-in hybrid electric F6DM models in Israel in 2009 (ahead of the commercialization of GM’s Chevy Volt, which will only start being produced in 2010).
Israel is a logical market choice, given Israel’s new embrace of the electric car revolution and its plans to, through Project Better Place (a groundbreaking initiative led by former technology-entrepreneur Shai Agassi) and the aid of tax incentives, build a nation-wide electric car network by 2011. In simple terms, such an infrastructure consists of plug-in electric cars supported by advanced battery technology, a network of recharge stations and battery exchange stations, and a smart grid fed with renewable energy.
I was initially skeptical of the true sustainability proposition of hybrid and electric car innovations. In a previous post, I argued that disruptive technologies, by themselves, offer little by way of sustainability if not integrated into the improvement of a greater whole at the systems-level. Thus, it is not enough to push the sales of fuel efficient cars if such a marketing blitz adds more cars on the road and further encourages urban sprawl. However, in that post, I did not discuss the potential for grid-tied plug-in electric vehicles (whether fully electric or of the hybrid sort) to transform our fossil fuel energy system into a renewable and cleaner one.
An Energy Crossroads
The green proposition of electric cars, especially the plug-in variety, is that by promoting the development of electricity generation and energy storage technology development (in the form of energy storage devices such as batteries), electric cars are not only reducing the need for gasoline, but also creates pull factors for the development of grid-connected renewable energy sources such as solar and wind energy by creating new electricity demand and provide energy storage solutions to address the problems of the intermittent nature of solar and wind power. In essence, individual electric cars, each equipped with their batteries, apart from serving as energy storage devices for the use of the car, could serve as energy reservoirs for the grid system, and even feed (and sell) back electricity to the grid if the vehicle is not in use.
Here then is a truly disruptive system, arranging discrete disruptive technologies (electric cars, advanced battery systems, a network of batter recharge stations, an integrated electricity grid) into a cohesive whole. The plug-in electric vehicle is symbolic of the energy crossroads between sustainable transportation and renewable grid power A more detailed explanation on how this renewable energy transformation is enabled by electric cars can be found on here on Better Place’s website.
It was initially unclear if BYD’s entry to Israel would be in collaboration with or competing with Project Better Place. Given the inter-operability of Better Place’s network (website: “Cars outside the Better Place model can re-charge their batteries as “guest vehicles,” so long as the driver acquires an easily-installed converter.”), it would make sense for BYD cars to take advantage of such infrastructure. A separate report suggests, however, that BYD might be building a competing infrastructure with certain Israeli partners. We shall see soon enough how this pan out.
Ahead of this Israeli market entry, BYD plans to launch the sale of grid-independent (i.e. non-plugged in) hybrid electric vehicle, the F3DM, later this year.
Big Cars, More Tax
On the transportation policy front, most of the traffic measures put in place for the Beijing Olympics have, as expected, proved to be short-lived. But the Beijing authorities continue to show their commitment to mass transit, reassuring that fares for public transportation will continue to be maintained at their current low levels to encourage use.
Separately, the Ministry of Finance is relying on tax measures to influence the auto purchases of consumers. Beginning September 1, taxes on bigger cars will be raised while those on smaller ones will be reduced (see diagram right for details). While the stated purpose of the higher taxes is to decrease fuel consumption and pollution, a closer look at the history of taxes on cars in China suggests that this may be more a protectionist move rather than a green one.
The Geneva-based World Trade Organization, based ruled against China this past July on its previous tax measure of preferential tax rates for domestically produced cars violated international trade rules. The newly revised tax rates do not explicitly single out foreign cars over domestic cars, but it just so happens that the smaller cars are mostly dominated by local manufacturers while larger cars are imported. The Economist wryly observes:
China’s new tax is canny. It cuts fuel use, reduces imports, benefits local carmakers and may help to improve air quality. It also prevents any more pesky calls from Geneva.
Small Is Beautiful: A Review of the Beijing Auto Show 2008
After writing my post on China car culture, I just had to check out the Beijing Auto Show show for myself. Green was the theme, and nearly every car maker had a “green car” to boast about, whether it was a hybrid car, plug-in electric, or simple more fuel efficient variety. In most cases however, these “green cars” were nothing more than concept cars, and I wonder what proportion of these will every hit the market. I was irked that none of the informational plaques accompanying each car disclosed information on fuel efficiency. I was greatly impressed by the number of Chinese auto makers, and I’ve been told that the floorspace of this year’s exhibition has doubled to 120,000 square meters over last year’s floorspace (unverified). Symptomatic of the explosion of the Chinese auto industry since China joined the WTO in 2001. This blog piece by Jack Perskowski, CEO of auto-components manufacturer Asimco Technologies, tracks all the recent numbers in the Chinese auto industry.
I would like to talk about some of the green car technologies that I had the pleasure of seeing, and then in my next post, I want to crush all your hopes by telling you that none of this really matters by sharing and critiquing a brief exchange I had with Jack Perkowski himself at a talk I attended that same evening I attended the auto show.
Rising oil and commodity prices are driving the shift towards smaller, more fuel efficient and economical cars, as this piece identifies. My observations at the auto show backed this up. Every Chinese automaker had at least a few makes of mini cars.
Great Wall Goes Mini
In my ignorance of the Chinese auto industry, I had not previously heard of Great Wall Motor Company before, but apparently, they are among the top 3 independent (i.e. no JVs with foreign makers) automakers in China together with Chery and Geely. According to Wikipedia (of course!), Great Wall is “the first privately owned auto company of China listed on the Hong Kong stock market and has obtained HK$1.7 billion of financial investment.” Great Wall has an annual production of 400,00 vehicles, primarily through large-sized sports utility vehicles (SUVs) and crossover SUVs (CUVs). In order to grow market share, however, the company is undertaking a strategy of making more smaller cars in order to conform to changing consumer tastes. I had the chance to see some of these smaller cars.
The Great Wall Mini SUV (right) is the smallest SUV in China, featuring a 1.3 litre engine, supposedly with all the four wheel drive and other features of an SUV. I was honestly surprised it was an SUV, thinking it to be a rugged-looking version of the GWKULLA. This Mini SUV meets Euro IV emission standards. To put this in perspective, China is only adopting Euro III standards this coming July.
Finally, the GWPERI EV (below), a four-sear all-electric car that uses a permanenet magnet brushless DC motoro and adanced lithium ion batteries was on exhibit. It has a top speed of 130 kmh and can travel up to 180 km on a fully charged battery.
Of course, I have no idea what the exact fuel efficiency of the GWKULLA and Mini SUV are as this information was not disclosed. Nor do I have any idea it any of the above three cars will eventually make it to market.
Build Your Dreams
I hadn’t heard of BYD Auto either. In this case, however, I would probably be forgiven, for BYD Auto did not exist 5 years ago. BYD also stands for “Build Your Dreams”, the company’s mantra. The BYD Company started in 1995 to become one of the world’s leading makers of lithium ion batteries that are commonly found in mobile phones, and went public on the Hong Kong exchange in 2002. It did not get into the auto game until it acquired Shaanxi Qinchuan Auto Company Limited in 2003. It has since sought to capitalize on its competencies in the battery market to focus on building cars with battery-based engine systems, i.e. hybrids and electric vehicles.
At the Beijing auto show, I caught a glimpse of the darling of the F6DM, that made waves at the Detroit auto show earlier this year, as well as the e6, that was making its debut. The superiority of BYD’s cars come from its lithium iron phosphate batteries (or simply known as Fe batteries), which are to be distinguished from the lithium ion batteries that are found in most other electric/hybrid vehicles. The Fe batteries allow for a must quicker recharge, and lasts longer (see this piece that suggests it can last for 2,000 charge cycles) and can be easily recycled.
DM stands for dual mode. The F6DM (above) is an plug-in electric vehicle that incorporates a pure electric driving system and a hybrid electric driving system. Its Fe battery allows for a 50% quick charge in a mere 10 minutes, and can reach a maximum speed of more than 150 kmh. The F6DM will begin production this year, targettng the China market. It may hit the U.S. market in 3 to 5 years according to BYD Chairman Wang Chuanfu.
Debuting at the Beijing auto show was the new pure electric e6 (above). It can reach maximum speeds of 160 kmh and its lithium iron phosphate battery can be quick charged to 80% in a mere 15 minutes. BYD claims that the e6 will have a range of 300km, making it the longest range among all pure electric vehicles in the world. According to a Wall Street Journal article:
BYD Auto’s e6 electric vehicle, in part because of its relatively high price and the need to be plugged in relatively frequently to charge the car’s sizable on-board batteries, will initially be more ideal for use as taxis and other feet vehicles. The “feasibility” of the e6 is “very high as a taxi,” Mr. Wang [Chuanfu, chairman of BYD] said.
The e6 will hit the Chinese market in 2009 or 2010, and will be priced at about RMB 200,000 (about US$28,500) while the F6DM at about RMB 150,000 (about US$21,500). Not bad considering the prices of foreign-made hybrids being sold in China, as discussed in my earlier post.
Exciting stuff, but I’m not sold. I’ll tell you why in my next post.
3447 Followers
670 Fans
0 Readers