Wang Chuanfu, chairman of BYD Co. should be a happy man. Wang complained in 2010 that the central government was not offering enough consumer incentives for purchasing electric vehicles. Now, Beijing has extended rebates for battery electric and plug-in hybrid electric vehicles beyond 2015 and exempted buyers from paying a purchase tax, among other measures.
But it gets better, much better. BYD’s “dual mode” plug-in hybrid electric vehicle technology recently received an endorsement from Wan Gang, China’s Minister of Science and Technology.
Speaking at a recent conference in Tianjin, Wan used the technology to rebut those who say that range anxiety – the fear of running out of “fuel” – will stop Chinese from buying EVs. Range anxiety won’t be a big problem, said Wan, because of plug-in hybrid technology.
He illustrated his point with a story: I have a friend who owns a BYD F3 Dual Model electric vehicle, said Wan. He said that in half a year he has hasn’t even used one tank of gas because he recharges at home. “Why do you need to use gas sometimes?” Wan asked his friend. “If I need to go to Tianjin,” his friend explained, “when I run out of electricity I use gas.”
Wow! Could BYD have created a better commercial for its technology? No, because BYD’s commercials are pretty lame. But I digress. Why pay for advertising when the nation’s top science guy gives your company’s EV technology a free plug?
Wang Chuanfu didn’t miss a chance to tout BYD’s PHEV technology and why should he? At the same conference he mentioned that sales of BYD’s current generation Dual Mode vehicle, known as the Qin, sold close to 8,000 units in the first half of 2014 (the F3 is the older generation Dual Mode model.).
Next year, he said, monthly sales of the Qin could reach 3,000 units. These buyers were consumers, not government or corporate fleets, said Wang. And, he added, later this year BYD will launch a Dual Mode SUV model.
So will 2014 be the “First Year” of electric vehicle commercialization in China, as some at the conference apparently predicted (thanks to AutoHaus China for its story on the conference, which provided many of the Wang details.)?
To be sure, plug-in electric vehicle sales in China this year will be much larger than last year. Perhaps by the 300 percent some are predicting. They will still, however, represent a tiny percentage of total sales. And despite Wan Gang’s big talk on China issuing standard related to batteries and charging, there is still has a long way to go in that area.
As for Wang and Wan’s apparent belief that PHEVs have the magic technology to convince Chinese consumers to buy an electric vehicle, I prefer to wait until BYD’s Qin has been on the road a bit longer to crown it the range anxiety savior. Problems may arise with the technology. More PHEV models will also need to come on market so consumers will become more familiar with the technology and have more choice. And those will need to be at the right price point.
Also, consider the U.S. market’s cautionary tale. Sales of PHEVs rose 44.3 percent in the first eight months of 2014 to 40.748 units. But in August they fell 7.4 percent compared to the same month in 2013 to 5,935 units, according to Edmunds.com.
PEV sales in the first eight months accounted for less than 1 percent of the overall market of 11.2 million vehicles, pointed out Edmund’s analyst Jessica Caldwell.
“Electric vehicle sales were basically a rounding error in terms of the overall market,” said Caldwell.
The market share of all-electric drive vehicles in the first eight months – including BEVs and PHEVs – fell by 4.8 percent compared to 2013.
Remember, a few years ago analysts were predicting that PEVs, including PHEVs and BEVs, would at least have market share of single digits.
So in China is the glass half empty of half full? For Wang Chuanfu and Wan Gang it appears to be half full. But how quickly it moves past the half-way mark – if it does — remains to be seen.