Automakers BYD of China and Germany's Daimler agreed last month to invest a combined 600 million yuan to form a joint venture to manufacture electric cars. It is BYD's second green car joint venture, after partnering with Volkswagen in May 2009. In April of this year BYD debuted an electric car called the E6 that can be recharged at home. Because of its achievements, BusinessWeek magazine ranked the Chinese company at the top of its Tech 100 list of the world’s most promising IT companies.
Last month, Nissan CEO Carlos Ghosn announced that his company intends to become the world's leading electric car maker. He made the comments at a groundbreaking ceremony in Tennessee for a US$1.7 billion plant that will produce electric cars and batteries. Staring in 2012, the plant will roll out 150,000 Leaf electric cars a year, gaining a major foothold in the U.S. green vehicle market. The Leaf can travel up to 160 km on just one charge and hit speeds of up to 145 km/h. Nissan has already received some 20,000 advance orders in Japan and the U.S. for the car that is planned to hit showrooms at the end of the year.
Competition is intensifying in the global market for electric cars, and Japanese and Chinese carmakers are leading the way. Around 158 Japanese companies, including Fuji Heavy Industries, Mitsubishi, Nissan, Toyota and the Tokyo Electric Power Company, recently established the CHAdeMO Association, which aims to increase quick-charger installations worldwide and standardize charging formats.
Tokyo and Beijing have rolled up their sleeves to develop their green auto industries. China's Finance Ministry has begun offering a subsidy of 60,000 yuan for each electric car purchase in five cities including Changchun, Shanghai and Shenzhen. The Chinese government has set aside 10 billion yuan to subsidize electric car purchases and plans to set up 6,209 charging stands in 27 cities by the end of this year. Japan is offering 70,000 yen in subsidies to buyers of low-speed electric cars with speed limits of up to 60 km/h, and 1.39 million yen for faster ones. Korea's e-Zone low-speed electric car, which is being exported to Japan, is subject to these programs.
But Hyundai Motor, Korea's largest car maker, is lagging behind in the race. The Korean company will roll out a mere 30 units of its i10 electric car this year and plans to produce only around 300 to 500 next year. That pales in comparison to Nissan, which aims to sell 50,000 Leaf electric cars in the U.S. starting at the end of this year, and Mitsubishi, which is targeting sales of 9,000 i-MiEV electric cars in the U.S. and Europe. The Korean government plans to let high-speed electric cars go through a trial period in August before offering subsidies for buyers. But such subsidies will not be available until after next year. At this rate, experts say, local small and mid-sized electric carmakers will end up going bankrupt, pushed out by rapidly-expanding Chinese and Japanese rivals.
The global market for electric vehicles is expected to rise from 740,000 units last year to 1.29 million by 2020, according to JP Morgan. But if the Korean government and businesses continue their lukewarm approach, their aspirations to claim a 10 percent market share and emerge as one of the world's top four producers by 2015 will fall flat.
