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The pain of commercialization of electric vehicles
CITIC Group has recently signed an agreement with the Inner Mongolia Autonomous Region Government to establish an electric vehicle production base within the Shengle Economic Park. Industry experts suggest that this marks a significant step toward the industrialization and commercialization of China’s new energy vehicles. However, despite the official announcement, CITIC has not yet relocated to the site, indicating that the path to full commercialization remains complex and challenging.
According to insiders from the Merchants Department of Shengle Economic Park, the project is still in the early stages. While the deal was finalized, actual operations have not begun, raising questions about the readiness of the market and infrastructure for large-scale adoption of electric vehicles.
Zhou Heliang, a senior figure in the Asia-Pacific Electric Vehicle Association, expressed optimism about China's progress in the sector. He noted that Chinese electric vehicles are now at a level second only to Japan in Asia, with some technologies reaching international standards. The country currently focuses on pure electric and fuel cell vehicles, while hybrid models have already entered mass production abroad.
BYD Auto, which started developing electric vehicles in 2003, has made notable advancements. Recently, they launched a fast-charging station in Shanghai, capable of fully charging a vehicle in just 90 minutes. According to spokesperson Wang Jianyu, their electric cars can travel up to 400 kilometers on a single charge and reach speeds of 180 km/h.
Shanghai Shenli Technology Co., Ltd. is another key player, supplying all domestically operated fuel cell vehicles. Their technology converts hydrogen into electricity, offering a clean and efficient power source. Meanwhile, Tianjin Qingyuan Electric Vehicle Co., Ltd. believes that the technical foundation for commercialization is nearly complete, but more support is needed to bring these vehicles to the masses.
Despite technological progress, the high cost of electric vehicles remains a major barrier. Battery costs alone account for around one-third of the total price, and fuel cell vehicles are three to four times more expensive than traditional gasoline cars. This pricing issue makes it difficult for consumers to justify the purchase of electric vehicles over conventional alternatives.
Industry analysts stress that infrastructure development—such as charging stations, maintenance services, and battery recycling networks—is crucial for widespread adoption. Currently, such systems are still in their infancy, creating a gap between technological capability and real-world implementation.
Government support for electric vehicles is largely focused on research and development. During the “Tenth Five-Year Plan,†China invested 2.4 billion yuan in electric vehicle projects, with plans to increase funding to 5 billion yuan during the next phase. However, businesses argue that more concrete policies and incentives are needed to drive consumer demand.
While officials believe current investments are sufficient, Zhou Heliang suggests that future policies will gradually encourage the production and sale of energy-efficient vehicles. Companies like Changan and Dongfeng are taking a cautious approach, focusing on hybrid and small electric vehicles for now due to high initial costs and limited market readiness.
In conclusion, while China is making strides in electric vehicle technology, the journey to full commercialization is far from complete. It requires not only innovation but also strong government support, infrastructure development, and consumer acceptance. The road ahead is long, but the potential is immense.