China's anti-Teslas: cheap models drive electric car boom
By Jake Spring
BEIJING (Reuters) - More electric cars are sold in China than in the rest of the world combined, but are mainly locally-branded models that are cheaper and have a shorter range than those offered by foreign automakers such as Tesla TSLA.O and Nissan (7203.T: Quote).
The Chinese-branded electric vehicle (EV) market is propped up by huge government subsidies as part of Beijing's policy to build global leadership in cleaner energy driving.
China has spent billions of dollars on subsidies to help companies including Warren Buffett-backed BYD 002594.SZ (1211.HK: Quote) and BAIC Motor 1958.HK achieve large-scale production of plug-in vehicles, which are gaining traction among urban drivers as well as taxi fleets and government agencies.
Sales of battery electric and plug-in hybrids increased 60 percent in January-November, to 402,000 vehicles. By 2020, China wants 5 million plug-in cars on its roads.
The domestic EVs don't have the 'wow' factor of a fast, longer-range and luxury-style Tesla. They sell on price.
In Shanghai last year, a two-door battery electric Chery eQ cost around 60,000 yuan ($8,655) after subsidies. Without subsidies, the eQ would cost an additional 100,000 yuan or so. At this week's Detroit auto show, General Motors (GM.N: Quote) showed off its latest Bolt EV, which costs around $30,000 after a $7,500 federal tax credit.
"EV cars are very cheap (in China), you'll only spend a little money to buy a car. If you just go to work or use an EV in the city, it's OK ... for using within 100 kms (62 miles)," said Xie Chao, who works for a chemical company in Shanghai.
Xie said he has bought three EVs since 2015 - an Anhui Jianghuai Automobile (600418.SS: Quote) iEV4, a BAIC EV160 and a Geely Automobile (0175.HK: Quote) Emgrand EV - one for him to use, one for his wife and one he rents out. Continued...