So who is winning the electric car race? Hong Kong and Shenzhen battle it out in race to develop electric cars

So who is winning the electric car race? Hong Kong and Shenzhen battle it out in race to develop electric cars; 
Sluggish start for green vehicles in HK, Shenzhen


Fiona Tam in Shenzhen and Cheung Chi-fai


South China Morning Post
November 12, 2010 Friday


Electric cars may be capable of being driven as fast as petrol-powered ones, but sales in Hong Kong and Shenzhen are going at a snail's pace.


Both cities have declared their aim to become the electric vehicle hub of the Pearl River Delta, but so far the emission-free vehicles have caught the attention of a tiny niche market, with Shenzhen better placed to win the race.


"At this stage, Hong Kong won't be able to beat Shenzhen in terms of the quantity of electric vehicles since it does not have car manufacturing," said Professor Eric Cheng Ka-wai, a specialist in electric vehicles at Polytechnic University.


"The strong government support and favourable policies in Shenzhen also put the city in a more advantageous position."


About 19 months after Hong Kong supposedly embraced the zero-emission vehicles, the city has 80 such cars including, 37 private ones, out of 650,000 registered vehicles.


Shenzhen, with a strong industrial base and favourable government support, may be in a better position to reach its goal of becoming a hi-tech and low-carbon manufacturing centre. Even so, it has only 339 hybrid buses and 50 electric taxis - carmaker BYD's E6 model - plus 186 privately owned electric or hybrid cars.


Shenzhen has an ambitious target to put 35,000 electric or hybrid vehicles on the road by 2012. Among this cleaner and greener fleet will be 2,500 electric taxis, 4,000 electric or hybrid buses, and 25,000 private hybrid cars.


The city plans to build a national hybrid and electric car-making industrial base in five years with up to 60 billion yuan (HK$70 billion) investment. The industry, says vice-mayor Tang Jie , will produce 200,000 to 300,000 electric cars a year.


While buyers of electric vehicles on the mainland and in the United States get big cash subsidies, the only financial incentive Hong Kong offers is a waiver on the first registration tax.


But no matter what target is set and how many incentives are on the table, both cities face the universal challenge of expanding the electric vehicle market. One key barrier has been building a recharging network with enough coverage to give drivers the confidence to buy the cars.


There are only three charging service stations in the Longgang and Futian districts of Shenzhen. The government says there will be 13 by the end of the year, but only one has been added in the past six months.
This has deterred buyers, even with an attractive cash subsidy of up to 120,000 yuan - half from the central government and the rest from the Shenzhen government.


BYD, Shenzhen's electric-car maker, has reported only 300 sales of its plug-in-hybrid F3DM in the past eight months, even though it costs just 90,000 yuan after the subsidy.


"The biggest obstacle to boosting the electric car market is insufficient recharge [services]," said Gao Guohui , deputy secretary general of the Shenzhen municipal government. He does not expect a solution within two years.


Drivers of electric taxis also complain about the hassle of recharging, saying a typical daily run of 1,000 kilometres means they have to plug in two or three times a day.


Wang Chuanfu , BYD's chief executive, said last week that electric taxis in operation since May covered on average of 133 kilometres a day, far below the norm for those running on fuel.


To overcome the bottleneck, Shenzhen plans to build 25 large service stations for electric vehicles and 10,000 public parking places with recharging facilities by 2012.


The Southern China Grid, a state owned company, is already building free charging points, and the Shenzhen government is providing a 9,000 yuan electricity subsidy to users.


Back in Hong Kong, developing the charging network has been a priority for the government. There are now 28 recharging points in private and public car parks across the city, not including two quick-charging points being tested by CLP Power and Hongkong Electric.


The government hopes to boost the number to 500 in the coming months through a collaboration with the power suppliers, property developers and car park operators.


It is also pushing a measure to ensure all newly built parking lots must be equipped with charging facilities.
But installing the facilities at existing multi-storey buildings is challenging. Problems of multiple ownerships and liabilities need to be sorted out by property owners, power suppliers and the regulators.


Professor Cheng said Hong Kong had more physical constraints than Shenzhen in setting up its charging infrastructures and policymakers had to deal with diverse interests.


"If you want to build a quick-charging spot at the car park of a shopping mall, you are going to need a large area for laying the power infrastructure. If a spot is very close to homes, there might be safety concerns from the public," he said.


Leonard Cheng Wai-nam, general manager in charge of electric vehicles at Universal Cars, which distributes the iMiev in Hong Kong, said it was difficult to gauge the effectiveness of the strategies adopted by the two cities by looking at the numbers.


Instead, he said more attention should be paid to the contexts in which electric vehicles were promoted and launched. This is where Hong Kong leads Shenzhen.


"Hong Kong has all pre-conditions ready here - a compact city, a smaller daily mileage and a mature community of car owners. So once the momentum is set, it will take off very fast," Cheng said.


One of Hong Kong's biggest advantages is a reliable supply of electricity and a stable transmission grid.
"Just look across the border. They are still talking about power blackouts at homes and even factories during the summer. So our power network is no doubt a great asset."


Cheng also felt the top-down approach from the Shenzhen authorities did not necessarily entail strong backing from the community, businesses and individuals.


"Too often the mainland's focus is more on the economic benefits of the electric vehicles, and the carmakers are major driving forces in developing products that cater more for the needs of the domestic market."
November 11, 2010


Copyright 2010 South China Morning Post Ltd.