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The pain of commercialization of electric vehicles
In a recent development, CITIC Group has signed an agreement with the Inner Mongolia Autonomous Region People's Government to establish an electric vehicle base in the Shengle Economic Park. This move signals a significant step forward in China’s efforts to advance its new energy vehicle industry. According to industry insiders, this collaboration marks the beginning of industrial-scale production and commercialization of China’s next-generation electric vehicles.
However, despite the official announcement, CITIC has not yet set up operations at the site. According to information obtained by our reporter from the Merchants Department of Shengle Economic Park, the project is still in the early stages. This suggests that the road to full commercialization for electric vehicles in China may be more complex than it appears on the surface.
Experts in the field are optimistic about the potential of China’s electric vehicle sector. Zhou Heliang, an executive member of the Asia-Pacific Electric Vehicle Association and Honorary Chairman of the China Electrotechnical Society, noted that China has made remarkable progress in key areas such as vehicle system design, battery motor drive systems, and energy management. He added that China’s technology in these fields is second only to Japan in Asia, with some innovations reaching international standards.
Currently, there are three main types of electric vehicles: pure electric vehicles (PEVs), fuel cell vehicles (FCVs), and hybrid vehicles. While hybrids have already entered large-scale commercialization abroad, China primarily focuses on PEVs and FCVs, which are still in experimental phases.
BYD Auto, one of China’s leading automakers, has been researching electric vehicles since entering the automotive industry in 2003. Recently, the company built a fast-charging station at its Shanghai R&D Center, capable of fully charging a vehicle in just 90 minutes. According to BYD Spokesman Wang Jianyu, their electric vehicles can travel between 350 to 400 kilometers on a single charge and reach speeds of up to 180 km/h.
Shanghai Shenli Technology Co., Ltd. claims to be the sole provider of fuel-cell vehicles currently on the road in China. According to Shi Tao, the company’s public relations head, fuel cells convert hydrogen into electricity directly, which powers the vehicle’s engine.
Tianjin Qingyuan Electric Vehicle Co., Ltd.’s General Manager Wu Zhixin expressed eagerness for commercialization, stating that the technology is close to meeting market needs. “Electric vehicles can achieve all the functions of traditional gasoline cars,†he said.
Despite technological advancements, commercialization remains challenging. Lu Lei, chief engineer at the China Automotive Technology Center, mentioned that over a dozen national standards for electric vehicles have been established, covering components and control systems. However, while technical standards are in place, the real challenge lies in creating a supportive environment for mass adoption.
High costs remain a major barrier. Battery prices alone account for one-third of the total vehicle cost. Fuel cell vehicles are three to four times more expensive than conventional cars, while lithium-ion battery models are at least twice as costly. With such high prices, consumer demand remains limited.
Industry analysts emphasize that infrastructure is essential for the success of electric vehicles. Charging stations, maintenance services, and battery recycling networks need to be developed before widespread adoption can occur.
The government’s role is also crucial. Although investment in electric vehicles has increased significantly—reaching 2.4 billion yuan during the "10th Five-Year Plan" and expected to rise to 5 billion yuan in the "11th Five-Year Plan"—many companies feel that more concrete policies are needed to support the industry.
Zhou Heliang suggested that the commercialization process should follow a staged approach: demonstration, government-led demand, mass production, and gradual phase-out of traditional vehicles. However, current government support is largely focused on research and development.
Companies like Changan and Dongfeng are taking a cautious approach. Changan is focusing on hybrid vehicles due to market considerations, while Dongfeng is prioritizing small electric vehicles like sightseeing coaches and golf carts, citing high initial costs as a limiting factor.
As the electric vehicle industry continues to evolve, the path to commercialization will require sustained effort from both the private and public sectors. The future of electric mobility in China looks promising, but the journey is still long and complex.