China Promotes Electric Car In Auto Show

89th Geneva International Motor Show in Geneva
A charging station for electric cars is pictured at the 89th Geneva International Motor Show in Geneva, Switzerland March 6, 2019. (Photo: Reuters/DENIS BALIBOUSE)

The Shanghai auto show held this year gives emphasis to the global trend of making electric cars. Chinese drivers are inclined to purchasing the cars because of the government subsidies for electric vehicles which promotes sales.

Recently, China's government officials advocated building more electric cars as they impose sales targets for energy-efficient cars. Data showed that the government's call added financial pressure on some companies due to a significant sales slump. However, it was shown that the sales of pure-electric and hybrid sedans and SUVs increased 60 percent last year to 1.3 million. The sales are half the total sales globally. The global auto sales fell 4.1 percent to 23.7 million.

Chinese electric car buyers were attracted by the government subsidies of up to 50, 000 yuan for a car single purchase. The government subsidies were cut in half in January and it is expected to end next year. According to Paul Gong of UBS, the competition for electric cars is getting fiercer.

China has been promoting electric vehicles for 15 years as they hope to lessen the carbon emission in its cities and to gain an early lead in the electric vehicle industry. Reports showed that giant carmakers including General Motors, Volkswagen, Nissan, and others develop models that will suit the taste of Chinese clients. The global majors have the finances and the technology to build cars. However, their local counterparts, including BYD Auto and BAIC Group, have experience and have been selling low-priced electric cars for a decade.

The Shanghai show will open to the public on Friday. Automakers are expected to display dozens of electric vehicles including SUVs and micro-compacts that costs under $10,000. The cars aim to overpower the gasoline-powered models in terms of performance, cost, and looks.

Herbert Diess, the CEO of Volkswagen, said that it will be very difficult for a customer to decide against an electric car by the end of next year. He also said during his visit to China in January that The cars will offer roominess, space, fast charging and they will look exciting.

Automakers around the globe see great growth in the world's biggest market. They believe that the Chinese market will drive their revenue growth at a time when the demand in the United States and in Europe is flat or declining. It gives them a reason to cooperate with China's campaign to use electric vehicles.

Mr. Gong believes that the pressure to shift to electric vehicles is more an opportunity than a threat to Chinese automakers.

© 2019 Business Times All rights reserved. Do not reproduce without permission.
Sign Up for Newsletters and Alerts