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Here's Why Beijing Is Not Embracing Electric Vehicles

EconomyFeb 10, 2014 12:25PM ET
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By Angelo Young - It might be easier to buy an electric car in Beijing than a gas-burner, but locals aren’t buying.

Beijing has a population of nearly 21 million while its total commercial, governmental and residential vehicle fleet is about one for every four residents, according to municipal data from 2012.  Meanwhile, the city’s particulate matter pollution, caused by vehicular and industrial emissions that are linked to cancer and respiratory maladies, is second only to New Delhi as the world’s worst

To address the problem, Beijing’s local government has been trying to lure city residents to buying electric cars that don’t emit pollutants from exhaust pipes and can help bring down urban contaminant levels. (They do nothing, however, to mitigate pollution at the coal-burning sources of electricity.)

An employee checks newly-assembled electric cars to be exported to South America at an electric vehicle factory in Zouping county, Shandong province September 24, 2013. Locally, Chinese aren't really embracing EVs, at least not yet.Reuters

So far, however, only 1,701 new-vehicle applications have been submitted to Beijing authorities for EV private purchases as of Saturday, according to the South China Morning Post. Compare that to the 1.84 million applications the municipality currently has for gasoline-burning cars.

What this means is only 0.09 percent of all vehicles currently in the roster to be purchased by local residents are electric. This, despite the chances of any single car buyer getting a license plate for a gas-burner is less than one percent, thanks to a lottery system aimed at curbing the growth of polluting vehicles in the city’s already choked atmosphere.

Last month the local government made adjustments to the lottery system to improve chances for those who have repeatedly requested plates. Those who have applies at least 37 times now have a 2.4 percent chance of getting a license plate.

Meanwhile, the local government has set aside 20,000 license plates for EV buyers that is currently far more than the number of plates being requested, giving buyers of these green machines a 100-percent chance of obtaining a much-coveted license plate for their car purchases.

On Jan. 28, the government announced financial incentives of up to $10,400 for buyers of electric cars, which is higher than the U.S. federal government’s current $7,500.

So what’s the problem?

For one thing, Chinese consumers are wary of buying Chinese cars in general. If they can afford to buy foreign brands, they do. This is a challenge for local manufacturers like BYD Automobile, the country’s main manufacturer of electric vehicles. Modern electric vehicles are a new mass market technology, which adds to the apprehensions of the typical Chinese care buyer. Even in more developed EV markets like Japan, Europe and the United States, EVs make up a sliver of the total auto market in part because consumers feel the range of most EVs are limiting. Consumers must not only overcome this range anxiety but also Chinese-car anxiety.

Another problem in Beijing: limited infrastructure. Chinese cab drivers using the city’s 1,000 electric taxis have complained publicly about the long lines at the city’s 500 charging stations. Until that infrastructure is expanded buying an electric vehicle in Beijing is gambling on being stuck on the side of the road with a tapped-out battery.

"The lack of choice, safety and sustainability of this type of automobile are also reasons that deter consumers from buying electric cars," Luo Lei, the deputy secretary of the China Automobile Dealers Association, told Global Times.

Here's Why Beijing Is Not Embracing Electric Vehicles

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