As for many nations, energy security is an increasingly crucial element on China's national security agenda. As of 2009, over half of China's oil was imported, much from political and security hot spots around the world. Automobile fuel consumption now makes up over one-third of total Chinese fuel consumption and will likely reach over 50 percent of total fuel consumption by 2020. Reducing automotive energy consumption is a key imperative for China's energy security.
Following on from yesterday, for some reason, China is going all out betting on Battery Electric Vehicles to be the coming success story of our new decade. I can’t say I disagree with them, since I fully expect the batteries powering them to undergo major technology improvements in the next three years. The day of the 250 mile BEV is probably only one or two technology advances away. China is determined to takeover leadership in this sector, and I see little in the way to stop them.
Below, a must read article from the English language U.S. edition of China Daily.
In 2010, the Chinese government consolidated its focus and placed a real bet on one technology: Battery-powered electric and plug-in hybrid electric vehicles. A pilot program offered up to 60,000 yuan ($9,560) subsidies for these vehicles while traditional full hybrid electric vehicles would receive subsidies of only 3,000 yuan per vehicle, the same as for the most fuel-efficient gasoline engine-powered vehicles.
Big bet on better battery-run cars
By Stephen W. Dyer (China Daily) Updated: 2011-01-03 10:48
China is transforming into a force to be reckoned with in several new energy and transportation industries. Chinese suppliers now control almost half the global wind turbine market and over 85 percent of the Chinese domestic market. A Chinese high-speed train recently broke the speed record for unmodified commercial-use trains by reaching 486 km/h during a test run on the new Beijing-Shanghai high-speed rail link.
At the nexus of new energy and transport lies the new energy auto sector. BYD Automotive, an offshoot of a major Chinese battery maker, is now mentioned in the same breath as Toyota and other new energy vehicle powerhouses worldwide.
More.
I don’t agree with the writer’s assumption of a slow pick up, due to oil prices not getting to $100 till 2020. I think we will be there by the middle of summer, unless the Asian economy crashed for some reason. By 2020, it’s anyone’s guess as to what the oil price will be or even if it will still be trading in dollars. My guess is that it still will be, albeit in a reissued US dollar occupying a much more limited role in world trade. A lot will depend on how much new replacement oil we can tap in the decade ahead. But BEV is the way to go. HEV means twice the trouble and some multiple of weight. Sooner or later we will get to BEV winning out. Like the Chinese, I’d bet on sooner too.
Warren Buffett gave this Chinese company, otherwise known as Build Your Dreams, his stamp of approval by placing a bet to the tune of $232 million for a 10 percent stake in 2008. The Chinese government recently placed a big bet of its own, announcing significant subsidies in 2010 for battery-powered vehicles but not for the more mature full hybrid electric vehicles. Some might wonder what is behind the government's big bet, and what role might China play in the evolving global new energy auto industry.
More on Friday. Anyone attending the Consumer Electronics in Vegas on Thursday and care to comment on what's new?
Graeme Irvine