国家电动汽车补贴政策的解读英文.docx

A New Subsidy Electric Car Policy China Central GovernmentOn 13th September 2013, China Central Government issued a new subsidy policy 1 urging people to drive clean energy vehicles. It will be expected that the policy will have a significant impact on the automobile industry.1. Motivation and New Policy OutlineAs China has become the largest oil importer 2 and the biggest car market, national energy security concern and reducing the air pollution are the main drivers of the policy. Depending upon the capability of travel distance on single charge China Central Government will support $10,000 for an electric car on top and around $6,000 for a plug-in hybrid car in general. Bus and coach sector will get a strong stimulus of $90,000 on top. The policy doesnt say only Chinese carmakers will be entitled for the finance support, joint ventures, such as Toyota and GM in China will benefit as well. In addition, Shenzhen will have an addition of $10,000 subsidy for an electric car. In other words, a buyer in Shenzhen can have $20,000 discount. 2. Current Electric Car SituationThere was a similar but less insensitive package two years ago as China has been pushing for expanded use of electric vehicles, but like in the U.S., sales of electric vehicles in China have been disappointing so far 3 4. There are a number of reasons: l Premature market: the travel distance of an electric vehicle is short compared to a gasoline vehicle; recharging the battery can only be done at owners home because most of gas stations refused to install additional charge station for the electric vehicles as it will require a longer recharging time. l Safety reason: during the car crash the battery of an electric car could have more risky of causing fire than the one of a gasoline car because of short circuit. In May 2012 a BYD e6 electric taxi caught fire after an accident in Shenzhen that killed three passengers and raised alarm over the safety of electric vehicles containing large lithium ion battery packs. Although the investigation did not spot the flaw design of the batteries, it was a warning message to the public 5. More recently, Teslas electric cars have brought into the spotlight as a battery fire in a Tesla Model S on 7th Oct 2013 6. l Other factors: longer time and inconvenience of battery recharging process are also the reason. As most of families dont have the garages in China, setup charging equipments in street parking slot will annoy the people.3. Does the new policy work this time?A positive result by using the electric cars was reported from Chengpeng Taxis in Shenzhen City. The company has purchased 800 BYDe6 by the end of 2012. The local government provided both finance support for both electric cars and also heavily invested in charging stations around the city. It has been reported that Chengpeng Taxi has net profit 5m Yuan in the first quarter of 2013. Encouraged by this news Shenzhen government will deploy further 2000 electric cars in 2015 and replace the existing 15,000 taxis within 3 years 7. Plus quiet trip by taking an electric taxi, a customer will also have 3 yuan cheaper per trip than by taking a gasoline taxi. The side effect is that the taxi drivers complain recharging the batter at least 3 times per day and a longer recharging time, even the loss can be balanced by operational cost saving 8. From a high level industry strategy point of view, the newcomer-an electric car targets the niche market and challenges the incumbent-gasoline car. It is very likely that this niche market will dynamically change to the mainstream market in future if the newcomer has comparable advantages, such as competitive price, energy efficiency, longer travelling distance etc. Based on simple strategy analysis, a comparison of some key factors was given in the table below:FactorsGasoline CarElectric CarTechnology and MaturityWell developed technology, mature and strong market positionIn the progress of development, slowly growing market but significant improvement of technology had been made in recent years.Price and Substitutes Product price is very competitive, but running cost -oil price is a concern.High product price, but running cost is low. Without the government intervention, it would take a considerable time for the success. Service NetworkEasy to access, both re-full and mechanical maintenance. Being developed and still a lot of room for improvement.Environment Factor Co emission No co emission and environmental friendly With the strong government insensitive, such as $20,000, it gives an electric car a significant advantage over the gasoline car. As a newcomer, the technology has been growing rapidly, it has been seen that the new model of BYD can travel up 400km on single charge 9. In addition, it is the first time that China Central Government has ordered its organizations and public sectors in major cities to have at least 30% electric or hybrid cars within two years period, a strong push to the consumers, related service network and industry. As a well organized society in China, this will be the most important factor in market prediction. In conclusion, this new policy will have a significant impact on the market within two years time, the reasons are strong financial subsidies, new technology improvement and central government order. Reference 1 C. C. Government, “/zwgk/2013-09/17/content_2490108.htm,” Online. 2 J. Blas, “/cms/s/0/d33b5104-84a1-11e2-aaf1-00144feabdc0.html#axzz2i8neMgrl,” Online. 3 W. Institute, “/2013/06/125492/,” Online. 4 A. Young, “/electric-car-charging-station-made-chinese-electric-carmaker-byd-partially-melts-freaking-out,” Online. 5 AutoWeb, “China Autoweb (2012-05-28). Initial details on fiery crash involving BYD e6 that killed 3. Green Car Congress. Retrieved 2012-08-13,” Online. 6 REUTERS, “