China to become world's largest market for new energy vehicles

BEIJING - China is set to pass the US and become the world's largest market for new energy vehicles this year as supporting measures from the government start to pay off, industry insiders observe.

"The market for new energy vehicles is moving from demonstration to growth, and the Chinese market is likely to be the world's largest this year," said Dong Yang, vice chairman of the country's automobile guild.

In the first seven months of this year, sales of new energy vehicles increased by 2.6 times year on year to nearly 90,000 despite sluggish auto sales in general. Production exceeded 95,500, up 2.5 times from the same period last year.

Greener growth and cleaner air is part of China's national strategy. Governments at central and local levels keep rolling out encouraging policies to attract private consumers, including tax exemptions, price subsidies and free number plates.

In the national capital Beijing, where exhaust emissions largely contribute to the notorious smog, a fresh round of "special treatment" for new energy vehicles include free parking and exemption from number plate traffic controls were established.

Many Beijingers are so tempted that, in the lotteries through which number plates are allocated, the chance of getting a plate for an electric car has sharply dropped from 100 percent to 40 percent within two months since applicants surged dramatically.

"Although not suitable for long-distance trips, driving it in the city is good enough," said Shu Xiaomei, a college professor in Beijing who bought a pure electric car in June.

Shu considers the deal "cost-effective", as the new vehicles cost only half the price of their gas counterparts thanks to government subsidies. But a lack of charging facilities remains a major inconvenience, she added.

Industry regulators and automakers have been pushing for supporting infrastructure to further increase the appeal of electric vehicles.

Guangzhou City government specified that at least 18 percent of new residential or public parking lots should be installed with charging facilities.

US electric car maker Tesla promised to help build more public charging facilities in China. It now has hundreds of supercharging stations and more than 1,400 public charging poles across the country.

By 2020, China plans to have five million new energy vehicles on its roads as well as 4.5 million charging stations.

Chinese consumers prefer plug-in hybrids to pure electric cars as they run for longer and are not so reliant on charging facilities, according to the latest report by China Association of Automobile Manufacturers and global marketing research firm Nielsen.

However, as pure electric cars enjoy more preferential policies, sales almost doubled compared with hybrids in the first half of 2015.

The number of pure electric cars and plug-in hybrids produced domestically should top 1 million by 2020, according to the "Made in China 2025" plan for Chinese manufacturing released by the cabinet in May.