22 April 2019

Protectionism focus moves to e-car charging facilities

China has changed the rules of game to prop up its fledgling new-energy vehicle industry by handing out subsidy directly to the carmakers rather than coursing it through local authorities as it did in the past. But the new policy will not end local protectionism in the sector since the center of gravity has merely shifted from the vehicles to the charging facilities.

Beijing provides a typical example of the regional protective barriers that have stalled the industry’s development. Under the new subsidy policy, BYD Co. Ltd. (1211.HK), a Shenzhen-based electric car manufacturer, stands a good chance to make further inroads into the capital city as its flagship product, the e6, is one of the few pure-electric vehicle models able to fetch the highest subsidy of 60,000 yuan (US$9,506) with its cutting-edge battery technology.

But the opening of the nation’s biggest charging station for electric taxis in Beijing over the weekend indicates that BYD’s efforts to enter the capital’s public transport market will be a bumpy ride. True, auxiliary facilities in Beijing are becoming increasingly friendly for new-energy vehicles as the city battles its worsening air pollution, but their benefits for BYD appear to be limited.

The newly-opened Tongzhou charging station, built by State Grid Beijing Electric Power Co., has the capacity to recharge 210 taxis simultaneously. However, the chargers are virtually tailor-made for the E150EV, the electric taxi model made by Beijing Automotive Group. Both State Grid Beijing Electric Power and Beijing Automotive Group are backed by the municipal government.

With the help from the local government and the State Grid, Beijing Auto now expects its pure-electric car sales to hit 3,000 units this year, challenging BYD’s leadership in the market. On the other hand, without the support of charging facilities, BYD will only run up against the wall in vying for individual or fleet buyers for its e6 in Beijing.

BYD is well aware of the importance of charging stations in marketing its electric vehicles. Wang Chuang-fu {王傳福}, founder and chairman of BYD, sought cooperation with China Southern Power Grid in July in the construction of charging piles, but it is unclear whether anything came out of their discussions.

Southern Power Grid is the smaller of the country’s two major power grids. In order to market its models nationwide, BYD needs to get State Grid on board, which would be an even more formidable task.

– Contact the writer at [email protected]




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