BEIJING: This year’s Shanghai auto show highlights the global industry’s race to make electric cars Chinese drivers want to buy as Beijing winds down subsidies that promoted sales.
Communist leaders are shifting the burden to automakers by imposing mandatory sales targets for electrics, adding to financial pressure on them amid a painful sales slump.
Chinese purchases of pure-electric and hybrid sedans and SUVs soared 60% last year to 1.3 million – half the global total – but overall auto sales shrank 4.1% to 23.7 million.
Buyers of electrics were lured with subsidies of up to 50,000 yuan (RM30,686) per car, but that support was cut by half in January and ends next year.
“Competition is getting more fierce,” said industry analyst Paul Gong of UBS.
Communist leaders have been promoting electrics for 15 years in hopes of cleaning smog-choked Chinese cities and gaining an early lead in a promising industry.
General Motors, Volkswagen, Nissan and other global majors are developing models to suit Chinese tastes. They have money and technology, but local rivals have experience: brands including BYD Auto and BAIC Group have been selling low-priced electrics for a decade.
At the Shanghai show, which opened yesterday, automakers display dozens of electrics, from luxury SUVs to micro-compacts priced under US$10,000 (RM41,145). They aim to compete with gasoline-powered models on performance, cost and looks.
By the end of next year, “it will be very difficult for a customer to decide against an electric car”, said the Volkswagen AG CEO, Herbert Diess.
“The cars will offer roominess, space, fast charging,” Diess said during a January visit to Beijing.
Automakers are looking to China, their biggest global market, to drive revenue growth at a time when US and European demand is flat or declining. That gives them an incentive to cooperate with Beijing’s campaign to promote electrics. — AP