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China 'can still lead' electric vehicle sector

China 'can still lead' electric vehicle sector

Updated: 2012-04-20 21:47

By Li Fangfang (

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Despite lackluster sales of electric vehicles in China, the nation may still become a global leader in the electric vehicle industry if policymakers and manufacturers shift their focus from battery-electric vehicles toward a mid-term perspective focusing on plug-in hybrid electric vehicles, said global management consulting firm McKinsey & Co.

The US company's prediction came in its report Recharging China's Electric Vehicle Aspirations released on Friday, based on interviews with more than 30 policymakers, industry leaders and academic experts.

"Despite challenges and initial setbacks, electric vehicles are here to stay in China, as a better solution to solve China's energy and pollution challenges," said Axel Krieger, partner in McKinsey's Beijing office and leader of McKinsey's China Auto Hub. "Moreover, as there is no shortcut to battery electric vehicles, plug-in hybrids can be the right bridge to the long-term goal of pure electric vehicles' take-off."

He indicated that by producing plug-in electric vehicles, China's automakers will have a better chance at kick-starting electric vehicle sales.

McKinsey estimated that plug-in electric vehicles with 15 kilowatt-hour batteries will become cost competitive with internal-combustion engine vehicles in China by 2017. Plug-ins with smaller 10 kwh batteries could reach cost parity with combustion engine vehicles as soon as 2014.

China now risks falling short of its electric vehicle aspirations, with 6,000 electric vehicles, no more than 10 models, produced in 2011, only 0.03 percent of the year's total output, well short of the 500,000 industry capacity it had slated to come on stream by 2015, according to the report. The 16,000 charging piles built in 2011 were also far lower than the industry's target of 400,000 units by 2015.