Billions Riding On The Proper Way Forward For Electric Cars


Will the electric cars of tomorrow be plug-in hybrids or battery electrics? That’s the question the world’s auto makers are asking themselves right now. It is an issue that is especially important for the Chinese market, where more than 20 million new cars were sold last year. Right now, China has some hefty incentives for drivers who buy what is called a “new energy vehicle.” Basically, that means anything that does not rely on a conventional internal combustion engine as its only source of power. Hybrids, plug-in hybrids and battery electric cars all qualify for the “new energy” label. Sales of those cars quadrupled in 2015.

Electric cars in China

But this week, Lou Jiwei, China’s finance minister, said his government intends to reduce existing subsidiesby 20 percent over the next two years and 40 percent between 2019-2020. After 2021, Lou says subsudies will be phased out altogether. His government does not want manufacturers to become too reliant on  handouts. So much for Communist doctrine.

He publicly praises the credit trading system created by the California Air Resources Board, saying China should use CARB and its policies as a model. “Credit trading is the most effective way to ensure government neutrality on the technology’s development. The market should be able to choose the technical route,” he said.

Of course, there are direct subsidies, like rebates and tax credits. Then there are indirect subsidies. In most Chinese cities today, it is virtually impossible to register a conventional car, while new energy customers can get a registration quickly and easily. China is also spending big on charging infrastructure. It says it will have the capacity to recharge 5,000,000 cars a day by the end of 2016. But only people with cars manufactured in China or in cooperation with a Chinese company will be allowed to access the charging network.

These proposed policy changes leave car makers in a bit of a quandary. According to Reuters, Tesla, NextEV, and Bejing Auto Group have gone all in for electric cars. But executives at Volkswagen and BMW think plug-in hybrids are the key to the electric car future, at least in the near to medium term. “Once we leave the city, we are forced to confront the problem of a nationwide high-powered charging infrastructure – if you really see it as a realistic goal, I personally have some doubts – to drive pure electric over long distances,” said Jochem Heizmann, head of Volkswagen Group China.

BYD, one of the largest new energy car companies in China, focuses on plug-in hybrid technology for passenger cars but battery electric power for buses. It recently delivered the largest order of electric buses ever to the city of Shenzhen. Between plug-in and battery electric cars, it sold more passenger vehicles with plugs than any other company in the world last year — more than 62,000 of them.

The plug-in versus battery electric debate is going on all over the world. Most people think pure electric cars will win the marketplace eventually, but that may take 20 or more years to happen. In the meantime, plug-in hybrids will have an important role to play, even if they will be mere curiosities by the time 2050 gets here.

About the Author

I have been a car nut since the days when Rob Walker and Henry N. Manney, III graced the pages of Road & Track. Today, I use my trusty Miata for TSD rallies and occasional track days at Lime Rock and Watkins Glen. If it moves on wheels, I’m interested in it. Please follow me on Google + and Twitter.

  • jamesjm

    Similar to the consumers adopting cellphones, EV’s will also ramp-up once they come to market. Battery tech is already advancing at breakneck speed and we should see a 300 mile EV charge a year. Home energy storage is the next wave to happen.

  • RobSez

    I think for a short-term time frame of 5-10 years focusing on BEV technology advancements while fuel cell technology evolves makes the most sense. Ten years on, I think some form of battery/fuel cell hybrid will be the best balance of cost & range while also better for the environment.

    I don’t see any point in continuing to chase down the road after Petrol Hybrid Electric Vehicles (PHEVs). For each PHEV there is the pollution & industrial waste of producing 2 powertrains. Then there is the ongoing pollution created by charging AND burning petrol. Not to mention the financial cost of doing both because of both fuel & maintenance. Add to that we in the US still get between 1/5 & 1/4 of our oil from foreign countries. Finally, when a PHEV reaches it’s end of life, there is twice the waste to deal with. Even though right now most hydrogen comes from oil, I can’t believe we won’t find a better way to use renewables to do that in 10 years. Our planet is 3/4 water after all.

  • evfan

    “Will the electric cars of tomorrow be plug-in hybrids or battery electrics?”

    I think it depends on the time horizon. We are on a trend towards electricity away from gasoline. Right now, batteries are still very expensive and very heavy, which means PHEVs make a lot of sense.

    I see a gradual change, because cars will be overwhelmingly electric while delivery vehicles and semi trucks are not changing soon.

    I also see a great opportunity for US legislators and US automakers to take leadership in this transformation, but so far they prefer to cling to the past, and that will cost all of us dearly in the long run. (I do give GM some credit, but they are ceding ground by not making a plug in SUV)

  • super390

    Once Americans were familiar with gasoline cars, they fell in love with them, and then rebuilt their society and way of life around the strengths of internal combustion. That’s made it brutally hard to change their way of thinking. China has the chance to avoid that kind of car culture, and it has several reasons for doing so. Cars caused suburbanization in America. For China that would be a disaster. And while the US was the world’s leading oil producer during its first 60 years of driving cars, China’s oil industry is past its prime.

    The question for China was, embrace bicycles and mass transit, or ensure that a car culture arise on non-petrol technology? They seem stuck with the latter now.