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New energy cars gain momentum

By Li Fusheng | China Daily Europe | Updated: 2017-04-30 14:26

As Chinese people show a growing interest in new energy vehicles, industry insiders are urging carmakers to make technological progress to remain competitive and to change their sales and after-sales policies to boost consumption.

Automakers have presented 159 new energy cars at the Shanghai auto show, representing about 11 percent of all exhibits at the event.

According to a recent report from measurement company Nielsen, the popularity of clean energy vehicles is rising among Chinese consumers due to improvements in the cars' performance and mileage.

The report, based on a survey of 2,307 respondents from the country, says 27 percent of car-buyers are considering purchasing purely electric cars and 25 percent are interested in plug-in hybrids.

This is the first time that electric cars have attracted more fans than plug-in hybrids since the annual survey launched in 2012.

Nielsen says electric cars available in the country had an average mileage of 164 kilometers in 2016 and the number has grown to 252 km this year.

However, the survey reveals that people expect on average a range of 374 km.

The company says such expectations will push traditional carmakers to improve their research and development.

"It is one of the best times as a new sector develops; it is also one of the worst times, as competition is extremely fierce. Carmakers must do their best," says Olive Zhang, vice-president of Nielsen China. Some traditional carmakers have released concrete plans.

German giant Volkswagen says electric models based on its current platform can achieve a range of 300 km and those on its MEB platform will double the figure. "Cars based on the MEB platform are scheduled to be localized in China by 2020," says Jochem Heizmann, president and CEO of Volkswagen Group China.

New players continue to join the race. Within a year, the authorities have approved 13 new energy carmakers' plans to build plants. Their combined investment stands at 26 billion yuan ($3.8 billion; 3.5 billion euros; 2.97 billion) and their combined annual capacity will reach 760,000 vehicles.

Electric car startup Next EV has been showcased 11 models at the Shanghai auto show in the hope of getting a slice of the growing market.

China has been the world's largest new energy car market since 2015. Last year, it sold 507,000 electric cars, plug-in hybrids and fuel cell models, representing 53 percent growth year-on-year.

The rise in sales could prompt car dealers to change how they run their businesses, said Shen Jinjun, president of the China Automobile Dealers Association, at a new energy car meeting in Shanghai.

He said such cars differ from gasoline models in that they need little daily maintenance, which is now a major source of revenue for gasoline car dealers. Shen suggested that the companies could consider shifting the focus of their business from car sales and maintenance to building experience centers.

Nielsen's report shows that 60 percent of potential buyers would undertake online research, while about a quarter go to brick and mortar stores to see new energy cars and test-drive them.

Shen's organization has been pushing for changes to the current car warranty policy, which is tailor made for gasoline cars.

The warranty covers major components such as the engine and the gearbox, which electric cars do not have.

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