China's Cars to Go (Mostly) Electric Within A Decade, Says Report

Chinese automakers have a strategic reason to move quickly toward electric cars: the legacy car companies in North America, Europe and Japan haven’t yet mastered the technology. According to a new forecast from research and consulting firm Frost & Sullivan, that’s part of why China-based Chery, Geely, SAIC and Changan all unveiled alternative fuel cars at the International Auto Exhibition in China last month, and it’s a major factor in the country’s move toward electric vehicles. By moving early and fast, China could dominate the emerging EV market — not just in its own potentially $220 billion market (the size McKinsey expects China’s car market to reach by 2030), but also abroad. prius-china

China’s automakers aren’t waiting around for the dawn of an all-electric age, which will require a massive infrastructure buildout (for charging) and consumer education, Frost & Sullivan’s researchers note. They said in an announcement today that hybrid cars will be truly mass-market in China by 2011 or 2012, and that the country’s fleet will begin a minimum 10-year transition to plug-in hybrids and battery-electric vehicles as early as next year.

Already, the country’s domestic automakers have invested in hybrid technology, introducing more than 20 hybrid vehicles this year at the Shanghai auto show. So today’s hybrid giants — Toyota and Honda — and certainly Detroit’s Big Three can count on plenty of competition. As BYD Auto investor and adviser Li Lu said during a roundtable discussion at the Fortune Brainstorm Green conference last month, “We’ve been growing 100 percent for the last five to six years, and I have no reason to believe we will stop.”

The Chinese government, meanwhile, has thrown its weight behind electric vehicles, aiming to make it the world’s leading producer of EVs and eventually also electric buses. The Renault-Nissan Alliance, planning to roll out electric cars (and charging infrastructure) as part of a pilot project in central China‚Äôs Wuhan by 2011, will be near the front of the line of foreign-based automakers angling to benefit from government incentives such as hefty subsidies for EV buyers.

Long term, Frost & Sullivan expects China’s roads to be dominated by fuel cell vehicles. But it has a big caveat. “Globally, fuel cell cars have been hyped as the best solution for over ten years, now,” the firm said in a release this morning. “Ten years ago the engineers said it would be ‘ten years’ before the technology is practical for use.” Still waiting.

Photo courtesy Flickr user Hong Kong dear Edward

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