BAIC e150 China’s best-selling all-electric vehicle. BEIJING – Li Jing, manager of a BAIC electric-vehicle dealership in the Beijing suburbs, is a happy man. His store sells only all-electric vehicles produced by Beijing Automotive Industry, and business is good. “A lot of people are buying them now,” he says. “We have been selling 180 a month for the last three months.” EV sales in China are growing, although they represent a microscopic portion of the world’s biggest auto market. As there is little organic demand for the vehicles, the central and local governments have turned to a cornucopia of incentivizing policies to move the electric metal. “EV sales rely heavily on government policy,” says Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight. Beijing Municipality is a perfect example. In June, the government began exempting EVs from rush-hour restrictions keeping vehicles off the road for one day a week. That exemption coincides closely with the sales explosion at Li’s BAIC dealership. “The EVs are a second car for most buyers,” says Li. “They use them to get to work. You can drive an EV every day in Beijing.” China’s central government has set an ambitious goal of having 5 million so-called new-energy vehicles on the road by 2020. New-energy vehicles include battery-electric, plug-in hybrid-electric and hydrogen-fuel-cell vehicles, though no hydrogen-fueled passenger vehicles currently are being produced in China. After a slow start, this year sales have taken off. In the first nine months of 2015, deliveries of plug-ins in China more than doubled to 136,733 units. BEVs accounted for 64% of those sales. To produce this kind of growth, however, the central government and local governments have had to rely on various policies, such as the rush-hour allowance, to make EVs attractive to consumers. Not all of those measures have been effective. Government subsidies for EV purchases have been around for years with little impact. Exempting EVs from a purchase tax also did little to excite car shoppers. Owners of EVs for a time were exempt from Beijing’s license-plate lottery. The capital is among a handful of cities in China that attempt to control traffic by issuing a limited number of license plates each month via lottery. The wait to receive a plate can stretch to years. Since June EV owners have had to get their license plates through a lottery as well. Their wait reportedly is much shorter, however. “Young people have no chance to get a license,” says Zhang. “The EV lottery improves their chances to three to one.” Sales did start to grow last year because of the incentives, Li notes. The latest move, allowing everyday driving, seems to have been a tipping point. “Sales are really accelerating now,” he says. Even with all the favorable EV policies, Chinese consumers have another worry: charging. “Buyers can plug in to any outlet, but everyone worries about where to charge,” says Li. BAIC’s solution is to give away a free-standing charging station with each EV it sells. The state-owned automaker also has installed some 5,300 charging stations in cities around China to boost demand for its EVs.
EV sales are growing in China, spurred on by incentivizing policies from local and central government. EV’s are popular as a second car, mainly used for commuting, as they are exempt from rush-hour restrictions and the one-day-a-week policy. The government’s target is 5 million ‘new-energy’ vehicles by 2020. In addition, China has been investing heavily into renewable energy sources, including solar power plants, wind turbines, hydropower, biomass and biogas.