SHANGHAI—China has a long and successful track record of scaling up its industrial growth by hitching it to a continent-size home market. This strategy turned China's wind turbine sector from barely existent to a global leading force in five years. But when it comes to clean cars, the story appears to be different.
A program designed to boost China's transition to electric cars and plug-in hybrids has been stymied. Even with generous government support, cities here have added fewer cars than promised. The goal of revving the nation's clean car mass production has also gone unmet.
This comes as automakers from around the world are struggling to make low-emissions vehicles scale up in China, the United States and other markets where programs and regulations are calling for massive gains in fuel economy over the next 10 to 15 years.
China's program, known as "10 Cities, 1,000 Vehicles," planned to select 10 pilot cities every year from 2010 to 2012 and promote 1,000 units of clean cars in each city. Chinese cities responded to it so enthusiastically, they almost doubled the total promotion target.
But surprisingly, two years since the program rolled out, those cities have achieved less than one-quarter of that target, according to Timer, an auto consulting firm based in Shanghai. And among all the pilot cities, the company statistics show, no more than half the target was met in the best case, and in places like central China's Xiangyang, for instance, only seven clean cars were added on the roads since late 2010.
China wants clean cars badly. Already, emissions from petroleum-powered cars have choked Chinese cities with air pollution. Half of China's oil is now imported. With the largest and fastest-growing auto market in the world, the nation's dependence on foreign fuels can only get worse.
With automakers here lagging behind their Western peers in making traditional cars, the chance to catch up lies in producing technologically advanced models such as electric vehicles. Chinese clean car makers aimed to use their home market as a springboard to test new technology and create the scale of economics necessary for exports.
An array of difficulties
But as big as its need for cleaner cars may be, China's struggles in making the transition to clean vehicles have been bigger. Although Chinese leaders prepared for the promotion program with fiscal incentives and supportive policies, experts say, these blessings also developed into a curse.
As Timer analyst Robbin Cheng explained, many municipal governments were lured by benefits given to the pilot cities and were vying to get into the promotion program. To impress decisionmakers, cities came up with ambitious yet impractical plans that later failed to drive up clean car use.
The immature nature of clean cars added more difficulties. For one, even after government subsidies, clean cars still often cost much more than their cousins with internal combustion engines. Drivers complained that it was hard to find charging stations, and their vehicles, while clean, had a frequent tendency to break down. Beijing actually took dozens of electric buses off the road due to the inconvenience of using them.
Then there is a safety issue. Electric cars caught on fire in several pilot cities such like Shanghai and Hangzhou. Earlier this year, an electric taxi produced by leading Chinese automaker BYD became inflamed during a car crash in Shenzhen.
Chinese authorities never blamed carmakers for those accidents, but cities may think twice before adopting the untested clean car technology on a large scale. And for those who dare to go ahead, the question is, where would their clean cars come from?
Sales frozen by protectionism
"Chinese cities show a strong protectionism when it comes to buying clean cars," said An Feng, executive director at the Innovation Center for Energy and Transportation, a China-focused think tank based in Los Angeles.