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The new fashion plate in China is green

GREEN cars are shedding their pariah status and gaining popularity among Chinese consumers this year, helped by incentives such as easy access to license plates.

That’s a significant trend in the nation’s efforts to promote green transport as a way of cleaning up smog-choked cities. In the past, car buyers have shunned green cars, saying that charging times are too long, charging facilities are too sparse, driving ranges are too short and the vehicles themselves lack style gravitas.

Chen Han, an electric car owner who works as a senior auto analyst in a marketing research firm, said she hears friends and colleagues talking about new-energy cars now more than ever before.

“They ask my opinion as the owner of an electric car,” Chen said. “I think new-energy vehicles are becoming more accepted. I think that’s because of the car plate initiative and the fact that more electric models are now available.”

According to an auto survey of 2,000 potential car buyers and 300 owners of new-energy vehicles published by Nielsen in April, 27 percent said they are willing to buy an electric vehicle this year. That’s up from 14 percent last year and from only 1 percent five years ago.

Consumer interest in plug-in hybrids is also rising. A quarter of consumers in the survey said they are willing to buy plug-ins, up from 22 percent last year and 2 percent in 2012.

Major Chinese cities cracking down on pollution and congestion have introduced lotteries or auctions for new car plates. That means many people who want a plate just can’t get one.

To encourage green car ownership, many cities offer free or expedited plate access to new-energy vehicles.

“People living in big cities such as Shanghai, Nanjing and Shenzhen buy new-energy vehicles mainly because of the car plate,” said David Zhang, an independent automotive consultant. “If they want to get a plate for a gasoline-powered vehicle, they need to wait a long time. But if they buy an electric vehicle, they can obtain a plate quickly.”

Huu-Hoi Tran, a partner and China head of automotive at KPMG China, agreed.

“Chinese consumers are very aware of the traffic situation and car restrictions in large metropolises in China,” Tran said. “For people who want to own a car without the problem of license plate restrictions, an electric car is sometimes the only option.”

When I walk across Nanjing Road W. near my office in Shanghai, I see more people driving new-energy vehicles with the special green car plates. Combustion-engine vehicles have the standard blue plates.

Last December, the Traffic Management Bureau of China’s Public Security Ministry initiated the green-plate pilot program in the cities of Shanghai, Nanjing, Wuxi, Jinan and Shenzhen. The idea is to lift the profile of green vehicles on the road. If nothing else, the more people see them, the more green cars may become an accepted part of the transport scene.

“It took me just six weeks to get a green car plate for my electric car,” Chen said. “I would have had to wait much, much longer if I bought an internal combustion car. The car plate auctions can be very frustrating.”

Wang Xin knows that feeling. She works for a consulting firm based in Shanghai and has been trying her luck in the auction for almost a year. “I just haven’t been lucky yet,” she said.

She was one of more than 250,000 people who bid in last month’s Shanghai auction for car plates. Only 4.8 percent of participants emerged victorious.

Tran said new-energy cars are also starting to appeal to Chinese consumers because of their low maintenance costs and a civic sense of duty in reducing air pollution.

To keep the trend going, foreign and domestic automakers are listening carefully to what consumers expect in green cars.

For one thing, they want increased battery life, according to the Nielsen survey. It found that the actual green-car range of about 164 kilometers on one battery charge fell below consumer desires for a range of 265 kilometers. With improvements in technology, the actual distance is expected to rise to 252 kilometers, although expectations are rising, too.

Charging electric cars is also an area that needed an upgrade.

A survey by KPMG China and AutoForesight found that 53 percent of 100 green car owners and 73 percent of 120 potential green car buyers said they could tolerate a charging time of up to four hours. Still, a large majority of respondents in both categories said they would like to see the maximum fast charging time reduced to an hour or less.

Despite all their misgivings, Chinese consumers seem optimistic about the future for new-energy vehicles.

According to the KPMG and AutoForesight survey, 45 percent of current green car owners said they would be repeat buyers.

“I will buy a second electric car this year,” Chen said. “I am thinking of choosing the Tesla Model 3 because of its brand awareness, younger design and longer mileage. Chinese consumers have more choices in electric models than ever before.”

Olive Zhang, vice president of Nielsen China, said the new-energy vehicle market is certainly one of great opportunities.

“Sales of electric vehicles in China are expected to reach 400,000 this year, up 50 percent from 2016,” she said. “Sales of plug-in hybrid electric vehicles are expected to reach 115,000. That’s a 40 percent increase.”


 

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