China appears to have abandoned its plans to gain an early advantage on Western carmakers by beating them to the market with mass-produced electric vehicles.
As China develops more and more as a nation the demand for cars is increasing at a huge rate. The Chinese government had initially intended to skip hybrid technology to reduce the country's reliance on oil, and to improve the air quality in highly polluted cities like Beijing.
Politicians in Beijing had set targets for one million "new energy" vehicles to be on the roads by 2015 and 5 million by 2020, but this could now include regular hybrid vehicles to help meet the targets which many now feel was highly unrealistic. This is despite the subsidy schemes being run in five Chinese cities with discounts of up to $9,370 for pure electric vehicles.
It seems the plans for high numbers of electric vehicles have been partly quashed for the same reasons demand is expected to increase slowly in the west, namely concerns over range and expense. Even Chinese carmaker BYD ("Build Your Dreams"), backed by Warren Buffett, is reported to have delayed plans to export its electric vehicles such as the e6.
Hybrids are faring even worse - in contrast to its success in the U.S. and Europe, Toyota sold only a single Prius last year, and electric car subsidies that extend to hybrid vehicles may be required to kick-start that market.
The focus now has moved from pure electric cars to "hybrids and all vehicles that can reduce fuel consumption". It seems that, as in the West, Chinese customers like to walk before they can run when it comes to disruptive technologies.
[Financial Times (subscription required)]