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ORIGINAL ARTICLE
New energy vehicles in China: policies, demonstration,
and progress
Huiming Gong &Michael Q. Wang &Hewu Wang
Received: 18 December 2011 /Accepted: 8 January 2012
#Springer Science+Business Media B.V. (outside the USA) 2012
Abstract Since 2009, China has become the largest new vehicle market in the world. To address
the energy security and urban air-pollution concerns that emerge from rapid vehicle population
growth, China has initiated the Thousands of Vehicles, Tens of Cities (TVTC) Program to
accelerate the new energy vehicle (NEV) commercialization. In this paper, we summarize the
efforts made by the Chinese government since 1995 in the areas of research and development,
demonstration, and communalization of NEVs; evaluate the progress of NEV demonstration; and
provide some recommendations for future development. Our analysis has determined that the
deployment of NEVs for the TVTC Program is lagging behind the original plan and, on average,
only 26–36% of the goals have been attained by October 2011. Although China has approved
many NEV models for sale, significantly more than 50% of them are not in production. On the
other hand, stimulated by the policy shift, electric vehicle production has increased considerably,
thereby contributing 23% and 44% of the total NEV production in 2010 and 2011, respectively.
Additionally, because of the constraints imposed by price and technology maturity, lead-acid
battery technology is a substantial factor in the high-volume sales of top NEV car models.
Keywords New energy vehicle .Hybrid electric vehicle .Fuel cell vehicle .Battery electric
vehicle .Chinese electric vehicles
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DOI 10.1007/s11027-012-9358-6
H. Gong :M. Q. Wang :H. Wang
Center for Transportation Research, Argonne National Laboratory, 9700 South Cass Avenue, Argonne,
IL 60439, USA
M. Q. Wang
e-mail: mqwang@anl.gov
H. Wang
e-mail: wanghw@tsinghua.edu.cn
H. Gong (*)
the China Sustainable Energy Program, the Energy Foundation, Rm. 2403 CITIC Bldg., Jianguomenwai
Dajie No. 19, Beijing 100004, People’s Republic of China
e-mail: gonghuiming@efchina.org
H. Wang
State Key Laboratory of Automotive Safety and Energy, Tsinghua University, Beijing 100084, People’s
Republic of China
1 Introduction
Since 2000, China has experienced a rapid growth in new vehicle sales. By 2009, China had
become the largest new vehicle market in the world (Fig. 1). The average annual growth rate
of new vehicle sales in the past 10 years has exceeded 24% (National Bureau of Statistics
2000–2010). As a result, imported oil continues to increase due to almost stagnated domestic
oil production, while the total oil consumption is growing quickly. In 1993, China became a
net oil importer, and by 2010 more than 54% of the crude oil supply relied on imports
(Fig. 2) (National Bureau of Statistics 1993–2010).
Meanwhile, vehicles increasingly concentrate in the mega cities and city clusters in the
eastern part of China and capitals of themiddle provinces, mainly because of the relatively well-
developed economy and high personal income level. Because of imbalanced vehicle stock
distribution, as well as industry relocation from the east to the west and from urban areas to rural
areas in China, cities are suffering from poor air quality increasingly attributable to vehicle
tailpipe emissions. The PM10
1
data from 32 Chinese cities for 2009 collected by World Health
Organization (WHO) showed that none of the cities met the WHO guideline of an annual mean
limit of 20 μg/m
3
. Some cities, such as Beijing and Jinan, far exceeded the limit and reached
about 120 μg/m
3
(WHO 2011). Despite China’s great efforts to improve its air quality, the
current urban air quality is still poor enough to pose a health threat.
Realizing such challenges as energy security, urban air pollution, global warming, and
economy structure adjustment, China has chosen new energy vehicles (NEVs) as one of the
solutions to these problems. Accordingly, China hopes to leapfrog its auto industry to
become globally competitive with advanced vehicle technologies. The reduction of trans-
portation’s oil consumption and potentially boosting of the economy development by NEVs
are straightforward. But their environmental impacts in China are complicated because
Chinese electricity is still generated primarily from coal. Huo et al. (2010) analyzed CO
2
and air pollutant implications of electric vehicles (EVs) in China and found that while EVs
may not offer much benefit in reducing CO
2
emissions with current Chinese electricity
generation mix, they may have CO
2
reductions in future. Furthermore, EVs could improve
urban air quality by moving vehicle tailpipe emissions from urban areas to remote areas
where electricity is generated. In addition, emissions of electric power plants are easier to
clean up than those of millions of vehicles.
In the Chinese context, NEVs include hybrid electric vehicles (HEVs), especially plug-in
hybrid electric vehicles (PHEVs); battery electric vehicles (BEVs); and fuel cell vehicles
(FCVs). However, the definition sometimes covers broader vehicle technologies, such as
alternative fuel vehicles. In the past 10 years, the national government, local governments,
academic research organizations, and private companies have invested more than $1.79
billion to carry out NEV research and development (R&D), pilots and demonstrations, and
commercialization (MOST 2011a).
China is not the only country that devotes to transportation electrification. Many other
countries and regions, such as the United States and Germany, have set up goals to develop
NEVs as well. For example, the United States plans to have 1 million cumulative NEVs on road
by 2015 and provides $2.4 billion of loans to three of the world’s first electric vehicle factories
in Tennessee, Delaware, and California and $2 billion of grants to support 30 factories that
produce batteries, motors, and other NEV components (Energy.gov, 2011). Germany launched
1
Particulate matter with a diameter of 10 μm or less.
Mitig Adapt Strateg Glob Change
a campaign to put 1 million electric vehicles on road by 2020 and planned to provide $705
million of financial support (Msnbc.com, 2009).
Although tremendous efforts on research, development, and deployment of NEVs have been
made in China, their progress status has not been summarized and evaluation of Chinese NEV
evaluation has not been done, resulting in less understanding (and sometimes confusion) of
Chinese NEV development outside of China. This paper is intended to summarize NEV
activities in China, including policies and demonstration activities; evaluate Chinese NEV
technology demonstration and commercialization progress; and provide some observations for
Chinese NEV development in the future. The first year of the Chinese government’s12thFive-
Year Plan (FYP) is 2011. We hope that this paper can be helpful in identifying Chinese NEV
promotion barriers and thus in improving future NEV demonstration programs in China.
2 Data sources
Data on Chinese NEVs are scattered among various sources, which are mostly in Chinese
language. To conduct analysis for this paper, we draw data from these sources: national and
local governmental programs; 27 vehicle model bulletins issued by the Ministry of Industry and
Information Technology (MIIT), as of October 20, 2011; the Energy Savings and New Energy
Fig. 2 Annual crude oil consumption and domestic production in China (National Bureau of Statistics 1993–2010)
Fig. 1 Annual new vehicle sales in China (National Bureau of Statistics 2000–2010)
Mitig Adapt Strateg Glob Change
Vehicle Yearbook (2010); government documents (such as reports and public education
materials); workshops sponsored by government agencies; surveys of academic researchers
and NEV users; government websites; key public media coverage; and other web-based reports.
Although we made our best effort to collect the most up-to-date and reliable data, there
are data limitations, especially in data regarding NEV production and on-road NEV popu-
lation. Production data that we collected were limited to hybrid electric buses, hybrid electric
cars, battery electric buses, and battery electric cars. Production data for both special purpose
vehicles (SPVs)
2
and fuel-cell vehicles (FCVs) were not available, though their production
volume is relatively small. In addition, on-road NEV population data from 25 demonstration
cities covered different time periods, with 5 cities having aggregate statistical data only
through the end of 2010.
We used the annual and cumulative number of certified NEV manufacturers and models
by technologies and vehicle categories to analyze the NEV research and development
(R&D) activities and development status and trends. In addition, we collected annual and
cumulative NEV production volumes by technologies and vehicle categories to verify
market choices of products and technologies. More importantly, we compared on-road
NEV population in each demonstration city with the goal of each city so that NEV
demonstration progress in each city and nationwide can be evaluated.
3 NEV policy development
While the official definition of NEVs was not available until 2007, NEV-related work began
much earlier—in fact, in the 1990s. During the process of NEV R&D and demonstration, the
policy focus has changed, thereby reflecting the NEV development situation and what China
preferred at different stages. At the beginning, there was no clear policy preference. Then hybrid
technology became a high interest, mainly due to the introduction of the Toyota Prius and other
hybrid products in the late 1990s and during the 10
th
FYP period. Following that phase, fuel cell
technology became more promising. Recently, pure electrification has become the focus.
Figure 3summarizes the key policies and programs that China has had in place since 1995.
The 9th FYP (1995–2000) had two major developments for BEVs. One was to formally
highlight the importance of BEVs by adding BEVs into the National Key Science &
Technology Industrialization Projects (National Electric Vehicle Test and Demonstration
Zone 2004). The other development was the Clean Vehicle—Clean up the Air Program that
was launched by 13 ministries together in 1999 (MOST 1999; MOST et al. 1999). In this
program, clean vehicles covered a broad area, including clean conventional internal-
combustion engine vehicles, compressed natural gas vehicles (CNGVs), liquefied petroleum
gas vehicles (LPGVs) (two alternative fuel vehicles), HEVs, and BEVs. During this FYP, an
EV test and demonstration zone was established in Shantou, Guangdong Province, and an
EV standard technical committee was set up to lead EV standard development.
Based on the 9th FYP results, the Ministry of Science and Technology (MOST) estab-
lished an Electric Vehicle Key Project under the National High-tech R&D Program (the 863
Program) in the 10th FYP (2001–2005) in 2001 (Zhang 2001). And in 2004, the National
Development and Reform Commission (NDRC) revised the Auto Industry Policy and
developed an Energy Savings Medium- and Long-Term Plan, in which the auto industry
was first identified as one of the pillar industries for the national economy by 2010, and
2
SPVs include garbage trucks, street sweeping trucks, construction trucks, tourist vehicles, post office
vehicles, etc.
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hybridization and car dieselization were the technology focus (NDRC 2004a,b). Within
these five years, China specified and established R&D focuses on three electric drive
technologies (fuel cell, electric, and hybrid vehicles) and three associated technology
components (battery, electric motor, and electric control system) and successfully developed
several FCV, BEV, and HEV prototypes. The funding size, including both national and local
governments and enterprises, reached $290 million.
The most recent five years (the 11th FYP, 2006–2010) established a milestone for NEV
development in China by moving NEVs from the laboratories or prototypes to the market
and road in a large volume. In 2006, the State Council adopted the China Science and
Technology Medium- and Long-Term Development Plan, which for the first time mentioned
the NEV term in the official policies and specified focusing on hybrid vehicles, alternative
fuel vehicles, and fuel cell vehicles (the State Council 2006). At the same time, MOST
continued its support of the NEV and initiated the Energy Savings and New Energy Vehicle
Key Project under the 863 Program (MOST 2006a,b). During the 11th FYP, the total
funding, including both national and local governments and private sectors, exceeded $1.5
billion (Fig. 4). The Management Rule on New Energy Vehicle Production, adopted by the
NDRC in 2007, officially defined the term, NEV, for the first time. Based on the definition,
NEVs include HEVs, BEVs (including solar-panel-powered vehicles), FCVs, hydrogen
internal-combustion engine vehicles, and other vehicles with new fuels, such as di-methyl
ether and high-efficient energy storage capacitors (NDRC 2007).
Due to the worldwide economy crisis, China issued 10 industry adjustment and
renovation plans in 2009, and the Auto Industry Adjustment and Renovation Plan was
among them. The plan set a series of vehicle annual sales goals with incentive
policies to support. For example, new vehicle sales should exceed 10 million in
2009, and the average growth rate between 2009 and 2011 should be at least 10%.
Fig. 3 Key Chinese NEV policies and programs since 1995
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Most importantly, the plan required initiating the Energy Savings and New Energy
Vehicle Pilot Program and set the goal that, by 2011, NEV sales should account for
5% of the total sales of light-duty passenger vehicles (the State Council 2009). As a
result of the auto industry stimulus plan, China exceeded the United States as the
world’s largest new vehicle market in 2009, and the Ministry of Finance (MOF) and
MOST launched the NEV demonstration and promotion program by issuing the
Notice on Implementing Energy Savings and New Energy Vehicle Pilot Program
(MOF et al. 2009). This pilot program was also widely called the Thousands of
Vehicles, Tens of Cities (TVTC) Program.
In order to help China adjust its economic structure toward resource savings and move in
an environment friendly direction, and recognizing the strategic impacts of NEVs on the
auto industry in the future, the State Council issued Decisions on Accelerating the Cultiva-
tion & Development of Emerging Strategic Industries in October 2010, and it selected NEVs
as one of the seven strategic industries. In the policy, plug-in hybrid and pure electric
vehicles were further highlighted as the focus for demonstration and commercialization
(the State Council 2010). Meanwhile, the 12th Science & Technology Development FYP
clearly stated pure electric driving as the goal and claimed that the electric vehicle population
should meet 1 million by 2015 (MOST 2011b).
4 The thousands of vehicles, tens of cities program
The TVTC Program focuses on the demonstration of HEVs, BEVs, and FCVs in public service
vehicle fleets, including buses, taxis, government vehicles, and special purpose vehicles. In
January 2009, MOF and MOST approved 13 Tier I cities to carry out the demonstration (MOF
et al. 2009). Following that, MIIT and NDRC joined the program and approved seven additional
cities (Tier II) in May 2010 and five more cities (Tier III) in August 2010 for NEV demonstration,
together with MOF and MOST (MOF et al. 2010a,b). Meanwhile, the four ministries approved 6
cities among these 25 cities to carry out pilots to subsidize private NEV buyers, which support
only plug-in hybrid vehicles and pure electric vehicles (MOF et al. 2010c).
These 25 pilot cites are located in 21 provinces. One important reason to approve these
cities is their overall human population and vehicle stock numbers. By the end of 2010, these
25 cities together accounted for 18% and 33% of the national total human population and
vehicle stock, respectively. The 21 provinces accounted for 80% and 86% of the national
total human population and vehicle stock, respectively (Fig. 5) (National Bureau of Statistics
Fig. 4 Chinese NEV investment in the 10th and 11th 5-Year Plans (MOST 2011)
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2011; Ding 2011). If NEV development becomes successful, a significant portion of the
Chinese population will benefit from the air-pollution reduction features of the NEVs.
Both the national government and local governments provide financial support to
the NEV demonstration in the 25 cities. National subsidies mainly cover the extra cost
to buy NEVs, while the financial support of local governments partially covers the
extra purchase cost of the vehicle and focuses on infrastructure development and
vehicle maintenance. The amount of subsidies that each vehicle could receive depends
on the vehicle’s category, technology type, and vehicle efficiency performance. For
example, hybrid electric cars could receive a subsidy of 50,000 RMB per car from the
national government if the car could save at least 40% fuel relative to regular cars
and its electric power ratio exceeds 30%.
3
On the other hand, incentives for BEVs
and FCVs are much simpler, and they could receive subsidies of 60,000 and 250,000
RMB per car, respectively. The NEV buses have similar technical performance
requirements, but receive large subsidies per bus. Hybrid electric buses, battery
electric buses, and fuel cell buses could receive as much as 420,000, 500,000, and
600,000 RMB per bus (MOF et al. 2009). Figure 6provides more details about the
amount of subsidies that NEV types may receive from the national government based
on the vehicle category, technology type, and performance.
Based on the approved local demonstration plans from 25 cities, by the end of
2012 the NEV demonstration goals of these 25 cities could add up to 52,623 vehicles
in the public service vehicle fleet. Figure 7summarizes the cities and their NEV
demonstration goals in the public service vehicle fleet by three tiers, as well as the 21
provinces where these cities are located. Among the cities, Shenzhen (Guangdong
Province), Beijing, and Shanghai have the most ambitious goals, 9,000, 5,000, and
4,157, respectively (MOST 2011a). Some local governments have adopted even higher
goals than the plan in the TVTC Program. For example, Guangzhou (Guangdong
Province) and Chengdu (Sichuan Province) have decided to demonstrate 2,600 and
1,900 NEVs, compared with the goals of 2,050 and 1,030 approved by the national
government for the two cities (MOST 2011c; Chengdu Municipal Government 2010).
The six pilot cities for private NEV buyer subsidies also are displayed on the figure,
and the total goals reach 129,100 in the private vehicle fleet (Table 1)(MOST2011a).
Fig. 5 Human population & vehicle stock shares from 25 cities and 21 provinces to national totals in China
3
The ratio is that of rated power of the electric motor to the sum of the rated power of the electric motor and
the on-board engine.
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(a) Passenger cars
(b) Buses
Fig. 6 National subsidies for NEVs as functions of the electric power ratio and energy saving level (1,000
RMB/vehicle) in China (numbers in black are for HEVs; numbers in red are for EVs and FCVs)
Mitig Adapt Strateg Glob Change
5 NEV development status and progress
Each of the 25 cities has an approved NEV demonstration goal by 2012. We compared the
number of NEVs demonstrated on the road by date to their goal to indicate the progress of
NEV demonstration in individual cities. In addition, we examined the number of certified
NEV makers, models, and production volume by date to show the growth pattern and
technology development.
5.1 NEV makers and models
From 2005 to October 20, 2011 (the most recent date for which we could obtain data for this
paper), China certified 405 NEV models from 76 makers (Fig. 8).
4
Of these, 343 models
from 70 makers were approved to receive subsidies after launching the TVTC Program
(MIIT 2009–2011; CATARC et al. 2010). Comparatively, the United States approved subsidies
to 44 hybrid electric and battery electric car models from 17 makers
5
(Fueleconomy.gov 2011;
irs.gov 2011). Infact, most NEV models, 85%,were certified after 2008. Among 76 makers, the
median number of models per maker is only three, although the top maker has 26 NEV models.
Moreover, 20 makers have only 1 model each. Figure 9shows the NEV type mixes by vehicle
type since 2005. Buses were the dominant vehicle type from 2005 to 2008, and they have
remained the main vehicle type. The percentage of car models has not changed much, but the
percentage of special purpose vehicle models apparently has increased. The emerging SPV
models are reflected in the demonstration plan of most cities, where 5% to 68% of NEVs are
SPVs. For example, Beijing plans to demonstrate 5,000 NEVs by 2012, and 3,380 would be
SPVs (MOST 2011a).
From the technology aspect, hybrid vehicles definitely were the mainstream technology
before 2009. After that, impacted by the national policy direction shift to BEVs, the BEV
models became popular. Several FCV models are certified for demonstration, but the number
is quite small. Only 14 models are certified, mainly because of support to the Shanghai 2010
World Expo. The FCV demonstration also occurred before 2010, such as for the 2008
Olympic Games, and some updated versions of those previously demonstrated models have
been included in the recommended NEV model bulletin.
Overall, HEVs, BEVs, and FCVs account for 41%, 55%, and 4% of the total NEV
models, respectively. Buses, cars, and SPVs account for 63%, 21%, and 16% of the total
NEV models, respectively (Figs. 9and 10).
One interesting phenomenon is that almost every pilot province has NEV makers. Among
the 21 provinces that have NEV pilot demonstration programs, only 3 provinces—Inner
Mongolia, Yunnan, and Hebei—do not have their own NEV makers and certified models. Of
the provinces with NEV makers, Beijing ranks as the first, with 46 NEV models. Most other
provinces each have more than 10 NEV models (Fig. 11). In addition, along with these 21
provinces and 25 cities, other local governments have expressed a strong interest in NEV
production. For example, Guangxi and Heilongjiang Provinces have no approved demon-
stration cities, but they have NEV makers and certified models. This phenomenon does
indicate that local governments, similar to the central government, aspire to have the NEV
industry stimulate their economic development.
Although numerous NEV makers and models are certified by the central government, we
found that many of the makers do not produce NEVs, and many of the NEV models are not
4
The recent certified NEV models are listed in the 27th Auto Product Bulletin, dated October 20, 2011.
5
FCVs are not included because there are no models approved for receiving subsidies.
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in production. For example, only 55% of electric bus (E-bus) makers and 45% of electric car
(E-car) makers are producing BEVs, although hybrid bus and car makers are in a better
situation.
6
In addition, on average, only 33% of the certified 324 hybrid and electric vehicle
models are in production. For example, only 28% of hybrid bus models are in production
(Fig. 12).
5.2 NEV production, stock, and demonstration progress
The NEV production volume has increased steadily from 2005 to 2011. Especially since
2009, the volume has jumped to above 7,000, inspired by the TVTC Program. In 2006,
mostly due to the introduction of the Toyota Prius, the NEV production reached a high
volume (even though the Prius was not produced in China). By August 2011, the cumulative
NEV production exceeded 22,000, with most—16,740 NEVs or 76% of the total—produced
after 2008 (Fig. 13). Figure 11 also shows the NEV production distribution among the
provinces from 2010 to August 2011.
7
Nineteen provinces produced 14,152 NEVs, or 64%
of the total, since 2005. However, only 6 provinces had a volume that exceeded 500.
Guangdong Province, Anhui Province, and Hunan Province were the top three and produced
4,600, 2,747, and 1,613 NEVs, respectively (Chinaev.org 2011).
The NEV mix shows that hybrid technology dominated the products before 2010. After
the national policy began to shift to pure electric vehicles and plug-in hybrid vehicles
(conventional hybrid vehicles are treated as one type of energy-saving vehicle), electric
vehicle production increased significantly. However, cumulatively, hybrid vehicles are still
6
Once a maker or model does not have production for two continuous years, we assume that the maker or
model is inactive and no longer exists.
7
Because of limited data, we were unable to allocate NEV production data before 2010 to models, makers,
and provinces.
Fig. 7 Thousands of Vehicles, Tens of Cities Program in China
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the mainstream products—78% of the total NEV production—despite the number of electric
vehicle models, which account for 55% of the total number of all NEV models. Nonetheless,
the electrification trend is clear. The ratios of electric vehicle annual production to NEV
production rose from 0% in 2005 to 23% in 2010 and to 44% by August 2011 (Fig. 14).
Compared with conventional vehicle production, the NEV production is concentrated in a
few makers and models, even though there are many NEV makers and certified models.
Tables 2and 3summarize the production volumes of the top five makers and models for
electric buses (E-buses), hybrid electric buses (H-buses), electric cars (E-cars), and hybrid
electric cars (H-cars), respectively. The top five E-car and H-car makers account for more
than 99% of the total, while the E-bus and H-bus makers have less concentration, but still
more than 70%. The top five models account for 68%, 77%, 99%, and 90% of the total E-
buses, H-buses, E-cars, and H-cars, respectively.
Both the E-car and H-bus categories are dominated by a single company that has
significantly more production volume than the others. For example, Cherry produced
1,615 battery electric cars, which accounts for 71% of the total battery electric car produc-
tion. Because Cherry produces only the QQ3 in a large volume, this model accounts for 71%
of the total battery electric car production as well. The hybrid bus made by Wuzhoulong
accounts for 45% of the total hybrid electric bus production. Technical specifications of the
QQ3 model show that it uses a lead-acid battery. The model has a top speed of 80 km/h and a
driving range of 120 km at a 30-km/h steady speed. The top-selling HEV car, the Junjie FSV,
Fig. 8 Number of certified NEV makers and models in China
Table 1 NEV goals in six pilot cities for private NEV buyer subsidies in China
City Beijing Shenzhen
(Guangdong)
Hefei
(Anhui)
Hangzhou
(Zhejiang)
Shanghai Changchun
(Jilin)
Goal 30,000 25,000 21,100 20,000 17,000 16,000
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also uses a lead-acid battery and has only basic hybridization technology for the start and
stop functions. Due to reduced performance and use of a lead-acid battery, the cost of these
models is significantly lower than that of other models equipped with a lithium-ion battery
and capable of high performance. This may explain why these low-tech, low-cost models
have significantly high production volumes. We also found that lead-acid batteries are used
in buses. Wuzhoulong produced about 200 lead-acid, battery-powered hybrid buses in 2010.
However, because of the unavailability of data we could not determine how many buses of
the total 1,201 hybrid buses from Wuzhoulong used a lead-acid battery. The significant sales
by Wuzhoulong are indeed due to the low-cost, lead-acid battery, as well as the intense
promotion of NEVs by the Shenzhen government during the UNIVERSIADE in 2011.
We also compared NEV bus and car makers with conventional bus and car makers. Data
show that most top 10 conventional bus and car makers have joined the NEV production, but
(a) Annual (b) Cumulative
Fig. 10 NEV type mix by vehicle technology in China
(a) Annual (b) Cumulative
Fig. 9 NEV type mix by vehicle type in China
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only some of them play an active role in developing NEVs (Tables 4and 5). Interestingly,
new players or conventional makers that are not in a leading market position tend to be more
active in the NEV market. For example, none of the top 3 NEV bus makers come from the
top 10 conventional bus makers. Cherry and BYD rank first and third as NEV car makers,
but they rank only seventh and ninth among the top 10 conventional car makers (Auto
Weekly 2011; China Association of Automobile Manufacturers 2011). This trend implies
that the non-dominating, conventional vehicle makers may consider that NEVs offer a better
opportunity to successfully compete against the dominating makers.
Despite the recent significant NEV production growth, compared with conventional
vehicles, the NEV volume is still quite low. From 2008 to 2011, the ratio of NEV buses to
(a) Makers (b) Models
Fig. 12 Percentage of certified NEV makers and models that are in production in China
Fig. 11 Distribution of NEV makers and models by province in China
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conventional buses increased from 0.1% to 1.2%, while the ratio for NEV cars was tiny—only
0.04% in 2011 (Fig. 15). In 2009, the NEV car ratio encountered a big drop mainly for two
reasons. First, the conventional vehicle production volume increased by 52%, stimulated by the
incentive policies after the economy crisis. Second, NEV car production dropped from 2,002 in
2008 to 551 in 2009, which indicates that NEV car production was not steady at that time.
However, inspired by the national NEV pilot program, production became steady after 2009
(Chinaev.org 2011; China Association of Automobile Manufacturers 2008–2011).
The 25 cities have been approved three times, and the progress of each tier city is
different. Figure 16 depicts the NEV population and the progress of these cities by tiers.
After 31, 15, and 12 months, Tier I, II, and III cities have achieved 31%, 16%, and 5% of
their goals, respectively.
Figure 17 summarizes the NEV demonstration progress of 25 cities compared with the
national average progress, as of October 2011. On average, 26% of the total goals has been
completed nationally. At the local level, Hefei (Anhui Province) has exceeded 50% of its
goal. Seven Tier II and III cities have made progress of less than 10%. Among the 25 cities,
Shenzhen has the most ambitious goal—9,000 NEVs. Because of this ambitious goal,
Shenzhen did not rank at the top in terms of progress. Shenzhen completed only 26% of
its goal, even though it has the highest NEV population, at 2,363 (MOST 2011a,c; zzjjw.
com.cn 2010; MBA Library 2011;Li2011; Chen 2011;He2011;Wu2011).
(a) Annual (b) Cumulative
Fig. 13 Annual and cumulative NEV production volume in China
Fig. 14 Ratios of electric vehicle production to NEV production in China
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The private NEV vehicle fleet is still quite small. Shenzhen and Hangzhou each have sold
800 and 162 NEVs to private owners, which is about 3.2% and 0.8% of their goals,
respectively (MOST 2011c).
6 Discussions
6.1 Project monitoring and evaluation
In the past 10 years, China has invested a significant amount of funding to develop and
commercialize NEVs. However, project monitoring and evaluation is lagging behind. This
has been demonstrated from our research for this paper. We have attempted many ways to
collect the most updated and reliable data from different sources in order to determine the
status of the Chinese NEV program. However, there is no single source for such information.
Data about NEV makers and models since 2009 have been obtained from the recommended
NEV product bulletins released by the government. Makers and models before that time are
based on information from the Energy Savings and New Energy Vehicle Yearbook (CAT-
ARC 2010), which is edited by the China Automotive Technology & Research Center
(CATARC) and guided by the Technical Experts Committee for Energy Savings and NEV
Key Project under the MOST 863 Program. The NEV demonstration goals for individual
participating cities are from government documents and policies. The production volume is
from both the Yearbook and the website sponsored by the Clean Vehicle Production
Promotion Center, Energy Savings and NEV Key Project Office under the 863 Program,
and CATARC. Vehicle population data have been gathered from government documents,
workshops sponsored by the governments, government official websites, key media cover-
age, and surveys to local cities. Even with such efforts, the NEV population data have limits.
Among the 25 cities, 5 cities had NEV population data by 2010, 5 cities had the data by
March or April of 2011, and 15 cities had the data by July to October 2011.
Besides NEV sales and on-road stock, a strong program monitoring system could help
collect data and information about NEV prices, performance and consumer feedback,
investments, incentives, and infrastructure development. These data are essential for policy
Table 3 2011 top five Chinese NEV models
Name (production volume)
E-Bus BYD-Changsha (213), Shenma (202), Wuzhoulong (53), Yixing (48), Changlong (36)
H-Bus Wuzhoulong (1181), CSR-Times (407), Shenma (186), Foton (178), Dongfeng (100)
E-Car QQ3 (1615), E6 (271), Haima (192), Zotye (120), Tongyue (59)
H-Car Junjie FSV (395), Camry (228), Zhixiang (200), F3DM (167), Buick (127)
Table 2 2011 top five Chinese NEV makers
Name (production volume)
E-Bus BYD-Changsha (213), Shenma (202), Wuzhoulong (69), Changlong (57), Yixing (48)
H-Bus Wuzhoulong (1201), CSR-Times (447), Foton-Beijing (188), Shenma (186), Yutong (156),
E-Car Cherry (1615), BYD (271), Haima (192), Jiangnan (181), Nissan-Zhengzou(17)
H-Car Brilliance (396), Chang’an (292), GAC-Toyota (236), BYD (167), Shanghai-GM (127)
Mitig Adapt Strateg Glob Change
evaluation and improvement to ensure the program success. Both the national government
and local governments have established leading official committees and offices to support
the NEV development and demonstration. They are responsible not only for collecting all
the data, but also for verifying the data and conducting the evaluation. However, our
research has revealed that data collection and verification are not systematic and certainly
need improvement. Also, a comprehensive evaluation of program progress still is not
available. An annual evaluation mechanism and reporting will benefit the program and
generate increased public awareness and support.
6.2 Ambitious goals and technology reality
As of October 2011, 31 months have passed since the 13 Tier I cities were approved to start
the NEV demonstration. Only 16 months remain for them to meet their established goals.
For Tier II and III cities, the situation is even more serious, since they were approved in 2010
but had the same deadline. As explained above, the national average progress is only 26%.
8
The progress has been slower than anticipated for many reasons, such as overly ambitious
goals, immature technology and products, high costs of NEVs, and the lack of adequate
infrastructure. Realizing such a situation, it is understandable if the 2012 goal is not met on
time. More realistically, the government may need to extend the demonstration project
deadline so that Tier II and III cities could have enough time to meet their goals. Needless
to say, goals for individual participating cities have indeed been ambitious. However, some
cities and provinces themselves have adopted even more ambitious goals for 2015. Among
the 25 cities, 9 of them have adopted policies to set explicit NEV development goals by
2015, either by NEV production capacity or by economy output. The production capacity
adds up to 1.33 million (Xiangfan Development and Reform Commission 2009; Hangzhou
Development and Reform Commission et al. 2011; Zhengzhou Municipal Government
2011; Guangzhou Municipal Government 2011; Shenzhen Municipal Government 2009;
Tangshan Municipal Government 2010; Tianjin Science and Technology Commission
2010). Also, seven provinces have adopted policies to set up the provincial NEV goals,
which add up to 1.48 million by 2015 (Fig. 18) (Hunan Provincial Government 2011; Zhou
2010; Jiangsu Provincial Government 2010; Guangdong Provincial Government 2010;
8
Even considering the data update issue and assuming that all produced NEVs since 2009 go to 25 cities (i.e.,
18,702 NEVs by October 2011), the average progress was only 36%.
Table 4 Top 10 Chinese NEV bus makers
Bus maker NEV Ranking in conventional bus production
Wuzhoulong 1 Below 10
CSR Times 2 Below 10
Sunwin 3 Below 10
Foton 4 5
Dongfeng 5 Below 10
Jinlv 6 7
Shenma 7 Below 10
Ankai 8 Below 10
Yutong 9 3
Zhongtong 10 10
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Henan Provincial Government 2010; Shandong Provincial Government 2009; Liaoning
Provincial Government 2010). If all production capacity came into real production and
sales, the NEV population by 2015 would exceed the national goal in the 12th Science &
Technology FYP. There must be a good balance between ambition and the ability to meet the
goals. Otherwise, either poor products will penetrate into the market to satisfy the goals, or a
large gap will exist between the goals and progress.
6.3 Technology choices for current market shares or future potential
Although China has clarified the fuel cell, battery electric, and hybrid electric vehicles as the
key vehicle technologies and the battery, electric motor, and electric control systems as the
key automotive technologies to provide financial support, some confusion exists. The TVEC
Program’s incentives do not differentiate between lead-acid battery vehicles and advanced
vehicles that use a lithium-ion battery. Moreover, both public HEVs and EVs could receive
subsidies, while private NEV buyers could receive subsidies only if they purchase plug-in
hybrid vehicles and battery electric vehicles. As introduced previously, a lead-acid battery
was adopted for top-selling car models, and the performance of those models was inferior.
Table 5 Top 10 Chinese NEV car makers
Car maker NEV Ranking in conventional car production
Cherry 1 7
GAC-Toyota 2 Below 10
BYD 3 9
Brilliance 4 Below 10
JAC 5 Below 10
Chang’an 6 5
Jiangnan 7 Below 10
FAW-Haima 8 Below 10
Shanghai-GM 9 2
Dongfeng 10 Below 10
Fig. 15 Share of NEV bus and car annual production compared with total conventional bus and car annual
production in China
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Another vehicle category is SPVs, which play an important role in many cities’
demonstration plan. On average, about 20% of NEVs in 25 cities are SPVs. In fact,
the SPVs’ratio in the Beijing’splanisashighas68%.Itmaybeagoodstrategyto
build enough expertise and knowledge from vehicles with simple, low performance
requirements before moving to fully functional competitive NEVs. Also, it is under-
standable if vehicle performance is not sufficient enough at the beginning mainly due
to cost-control reasons. However, the choice of current technologies and products
should consider technology and product development in the future, and not focus only
on meeting existing demonstration number goals. From this aspect, in order to be
price competitive, it is fine to reduce the lithium-ion battery size, which may result in
short mileage, low speed, and other power specifications. The products could work
well, especially in circumstances such as an urban driving fleet with SPVs.
Fig. 16 Chinese NEV population and the progress of each tier city in meeting their NEV goals by August 2011
Fig. 17 NEV demonstration progress in 25 cities in China by August 2011 (% of NEV goal completed by
each city)
Mitig Adapt Strateg Glob Change
6.4 Local market protection
This analysis found that almost all NEV pilot provinces have their own NEV makers. Under
such a situation, local governments tend to prioritize by using local products. The central
government realizes this problem and requires local demonstration cities to open their
markets for competition. It appears that this requirement has not resulted in meaningful
action. We noticed that some government policies clearly encourage local market protection,
especially through incentive policies and government vehicle purchases. If local market
protection happens everywhere, it would be difficult for good products to have a large
market share in order to reduce NEV overall costs and have high market penetration. In the
end, the NEV development in China may not become competitive.
China probably has the highest number of conventional vehicle makers and models in the
world. In the past decades, one of the key concerns for the central government has centered
on how to consolidate its auto industry and a build strong, competitive industry. This
problem is still not well solved, and NEV development seems to face the same issue (i.e.,
too many NEV makers and NEV models within several years). The top NEV maker and
model were reviewed above. If we removed the top maker/model, we would find that the
aggregation is low. The government must develop policies to encourage good competition
and industry consolidation to form several leading NEV companies nationally.
6.5 NEV introduction and infrastructure requirements
PHEVs, EVs, and FCVs need new infrastructures to refuel them with electricity and
hydrogen. Hydrogen refueling stations are mostly for the limited FCV demonstrations in
large, concentrated events such as the 2008 Beijing Olympics and the 2010 Shanghai World
Expo. At present, EVs are prioritized in Chinese NEV demonstration programs. Thus, the
key infrastructure challenge is to establish EV charging stations. The urgency for developing
an extensive EV charging station network may not be too high at the current stage because
most demonstration cities now focus on public vehicle fleets for NEV applications and it is
much easier to establish and manage the recharging infrastructure to meet the NEV fleet
applications. However, with eventual penetration of NEVs into private vehicle owners,
development of NEV charging infrastructure will be an important component for successful
NEV deployment. Both the State Grid Cooperation of China and China Southern Power
Grid are working closely with local governments to establish EV recharging infrastructure. A
Fig. 18 2015 NEV goals for local cities and provinces
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few years ago, the charging connector standard between EVs and recharging stations was not
developed. Only very recently, China adopted four standards to mandate all charging
stations meet the same technical standards for EV charging stations (Miit.gov.cn 2011).
Shenzhen (of Guangdong Province) has the most NEV population on road and is rapidly
developing the charging infrastructure system. By August 2011, Shenzhen has established
62 charging stations, 57 of which are for bus charging; and it will have 2,349 charging poles
by the end of 2011 (MOST 2011c). In summary, China needs to strengthen the development
of NEV recharging infrastructure to meet the demand of growing private NEV users in the 6
demonstration cities and get ready for large-scale commercialization of NEVs.
7 Conclusions
The TVTC Program establishes a milestone for commercializing NEVs in China—but the
difficulties and challenges are real. Areas of concern include inferior technologies, immature
products, and the lack of monitoring and evaluation. Meeting the NEV goals by the 2012
deadline will be difficult for the individual participating cities. However, despite the slow
progress of the program and the reality that some NEV technical performances may not meet
expectations, there is no doubt that the NEV program conveys the appropriate signal for
advanced vehicle technology development. China should continue the demonstration program
and facilitate the necessary strengthening by providing close monitoring and evaluation,
targeting financial support for advanced technologies such as lithium-ion batteries, updating
policies for NEV products based on performance evaluation, and removing local market
protection to encourage competition. A strong program monitoring and evaluation system will
serve to identify problems, improve incentive policies, and ensure the success of the program.
Acknowledgments This work was supported by the Office of Energy Efficiency and Renewable Energy of
the United States Department of Energy, under contract DE-AC02-06CH11357. The authors thank Dr. Hao
Cai of Argonne National Laboratory for providing assistance for this paper.
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