Chinese Auto Market Is a Key to Climate Change
Here are two sobering facts for anybody who believes that Global Warming is a real (and manmade) problem for future generations:
- China’s new car market is approaching 20 million vehicles per year, and could reach 30 to 40 million by 2020. Compare that to a mature market of about 13 or 14 million new car sales in the U.S.
- If China were to have as many cars per capita as the U.S., the country would have one billion cars on its roads. Last year, China crossed the 100 million-vehicle mark. The country could hit the 1B number in a couple of decades.
So, while EV drivers in the United States are going electric in order to reduce domestic oil dependence and cut tailpipe emissions, the growth of the Chinese auto market poses a much bigger threat when it comes to climate change.
Today, ChinaDaily.com.cn reports that only 235 electric vehicles were sold in the second quarter of the year—a 31 percent drop from the first quarter. This doesn’t speak well of the Chinese government’s five-year development plan, approved in April of this year, for the country's “new-energy” vehicles. The plan aims to increase the production and sales volume of battery electric vehicles and plug-in hybrid electric vehicles to 500,000 by 2015, and 5 million by 2020.
In 2012, EVs represent 0.02 percent of the total auto market in China. As in the United States, the issue is cost. Even after subsidies, electric cars are priced about 50 percent higher than comparable gas models. For example, BYD’s F3DM plug-in hybrid is selling for about US $27,000 without subsidies—while the gas-powered model, the F3, costs less than $9,000.
Pike Research forecasts that the market for electric cars and plug-in hybrids will grow to a modest 152,000 units by 2015. The rest will be powered mostly be petrol. Reminder: Every gallon of gasoline that’s burned puts about 25 pounds of CO2 into the atmosphere—a climate that is shared by every human being on the planet.
Shift in Strategy
You might ask yourself if EVs are all that relevant in China—especially considering how coal-dependent the country is. Apparently, the Chinese government asked this question, and responded by expanding its clean car goals beyond electrified models to whatever technology can help the country’s average fuel consumption reach 34 mpg by 2015, and 47 mpg by 2020. It’s China’s version of CAFE.
In the U.S., new fuel efficiency standards implemented by the Obama Administration set 54.5 mpg as the target for 2025. That’s arguably Obama’s most significant accomplishment of Obama’s environmental policy.
Regardless, the stakes are high for China and beyond. With massive growth in the number of cars on Chinese roads, the ability for the country to shift to EVs and more fuel-efficient internal combustion cars is not a quibble about how a LEAF, Volt or Model S drives—or whether or not these models are worth a premium price or have enough range. In China, it’s a matter of allowing its citizens to breathe—or to face dizzying increases in cancer rates resulting from one billion tailpipes spewing emissions into the air. For the government, the shift to EVs represents a critical step to avoid a chokehold of imported oil on the Chinese economy.
And all the while, as China tries to move to plug-in cars or adjusts its policy to focus on overall efficiency, what comes out of the tailpipes of Chinese cars and the smokestacks of Chinese power plants will not only affect China. It will have a meaningful impact on how hot the earth’s atmosphere gets, and how fast.
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