A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

China: The $100 Billion Opportunity in China

After an extended period of 50%-plus annual growth, China recently surpassed the United States as the largest car market in the world. This is just the tip of the iceberg, as only 2% of the Chinese population owns cars. In other words, the market has vast potential to grow significantly bigger.

Given that the market is in its infancy, China has a unique opportunity to embrace newer and cleaner automotive technologies. This opening has not gone unnoticed by the Chinese government, which plans to fully seize on its ability to become a world leader in developing and growing the market for electric vehicles. Last August, it commissioned more than a dozen state-owned businesses to begin building electric vehicles and announced ambitious goals to have all public vehicles running on lithium-ion batteries or other non-gasoline sources within 10 years. All told, China plans to be the largest manufacturer of electric cars by the end of 2012.

The big winners from this initiative, aside from the Chinese environment, will be native Chinese firms, but the opportunity is so vast that leading automotive and vehicle companies around the world will get some of the spoils. U.S.-based Ener1 (NYSE: HEV) is one of them. The company develops lithium-ion batteries for vehicles and inked a deal with Wanxiang, one of the largest auto parts makers in China, in early January. The joint venture will produce batteries for heavy-duty vehicles, including public buses, semis and construction vehicles.

The government announced in June 2010 subsidies of about $9,000 for electric-powered taxi cabs and vehicles driven by local government authorities, along with billions in subsidies to help companies develop innovative technologies to bring production costs down, while increasing volume so that batteries and vehicles can be produced more cheaply.


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.