2010-08-30 16:05

Other obstacles

In addition to concerns about Chinese consumer reluctance to buy new energy vehicles, other potential obstacles will need to be addressed for China to successfully develop and grow the industry. These hurdles include:

Increasing capacity to produce fuel cells and battery packs to meet expected future demand

Simplifying logistics for transporting, storing and installing large and heavy battery packs at assembly lines

Creating an extensive electric recharging infrastructure to support a large fleet of battery and plug-in hybrid vehicles

Identifying an environmentally safe solution for disposing of spent batteries packs

And perhaps most importantly, the need to achieve technology breakthroughs to lower price and to be economically sustainable without government incentives and subsidies.

Related readings:  Central firms to buy electric car technology  China accelerates electric vehicle dream  Charging guides for electric cars to be issued  China reviewing e-car battery standards

While these challenges are daunting, they may not be insurmountable. Over the past 10 to 15 years, China has demonstrated its ability to manage numerous challenges related to its economic and industrial development.

During the Asian financial crisis of the late 1990s, while much of Asia experienced a sharp downturn, China's economy and automotive industry continued to grow.

During the dot-com bust of the early 2000s, when the United States and Europe experienced a mild recession, China continued to grow. And despite complications caused by the recent global recession, China has managed to grow at a robust pace.

So we should not be surprised if China is able to pull off its ambitious plan to create its own future for new energy vehicles.

The author is a senior analyst at JD Power and Associates