Editorials

Green drive

(China Daily)
Updated: 2010-06-03 07:49

The global financial crisis had given China an opportunity to overtake the United States as the world's largest auto market sooner than expected last year.

As the world begins to embrace energy-saving and less-polluting cars, will China be able to repeat this success in the green car race?

A subsidy program for green cars the nation announced Tuesday indicates that it is indeed serious about championing electric vehicles and associated green technology.

In China, an electric car roughly costs about 200,000 yuan. So, China's green-car subsidy does not seem particularly more generous than those in developed countries, where the dole cushions hefty green car price tags by up to a third.

However, if the past is any guide, one should never underestimate the incentive that such subsidies offer to Chinese consumers. After all, there is still no better explanation than the government's small-sum tax cuts and subsidies adopted last year for unexpectedly triggering a spike in vehicle sales across the country.

If the latest subsidy can work magic in the five chosen cities by boosting electric vehicle sales, it is likely other major cities too will jump on to the bandwagon.

The result: Rapid expansion of domestic demand for green cars will push automakers to further cut costs thanks to economies of scale.

Economically and environmentally, it makes sound sense to encourage Chinese consumers to drive green.

(China Daily 06/03/2010 page8)