A new McKinsey report says China is the world's fifht most mature EV market, but this is not reflected in uptake or sales.
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SAIC Motor Corp has introduced its first commercially available electric vehicle (EV) for sale in China. BYD Motor Corp is now offering cut-price financing for its buyers. Now, a new report from international consultancy McKinsey claims China is the world's fifth most mature EV market.
Despite all of this and the initial enthusiasm and incentives being offered to China's potential EV owners, market growth is still sluggish, casting doubt on when China will have the infrastructure and desire to embrace fully electric vehicles.
SAIC's Roewe E50 small car, built on an entirely new platform developed by SAIC's R&D department, was launched in Shanghai to much fanfare. Powered by iron-phosphate batteries, the car has a maximum speed of 130km per hour and can travel up to 180km when fully charged. Despite a steep price tag of 234,900 yuan ($37,590 the Chinese automaker is hoping that government subsidies of up to 60,000 yuan ($9,630) in some cities will help drive sales.
Warren Buffett-backed BYD is also attempting to help fleet operators see past the comparably high costs of its E6 and K9 models with favourable financial leasing and auto loans. Under the new plan, supported by the China Development Bank, taxi and bus companies will be able to pay for the vehicles outright or through monthly installments with no down payment. Thus far, BYD has found it difficult to sell in volume outside of its hometown in Shenzhen.
Whilst McKinsey puts China ahead of the UK, Denmark and South Korea in terms of EV market maturity, many feel this ranking does not reflect issues in the domestic market. Yin Chengliang, deputy director of the National Engineering Lab, believes that despite subsidies and favourable lending terms, individuals will still be put off by high prices. Furthermore, claims Yin, most EVs are bought by fleet companies controlled by the Ministry of Transport.
The report predicts that the situation will not improve significantly within the next five years and that the government looks unlikely to reach its target of five million EVs on the road by 2020.