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How China’s city-focused electric car programs fell short

China’s cities are macro-laboratories that the government has been using to test out various roll-out strategies from industrial partnerships, to fast charging stations to rental systems. So why have the early numbers fallen short?
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China has been experimenting with how to get its population to adopt electric vehicles in a way that it only could: from the top down, using cities as test-beds. But the programs, launched back in 2009 with 10 cities, and extended in 2011 to 25 cities, was completed in 2012 and has fallen short. For example, Chinese electric car maker BYD sold only 1,700 electric cars and 700 electric buses in 2012 to a country that has over a billion people.

An article in the Stanford Social Innovation Review laid out one of the most detailed assessments I’ve seen to date on how China’s electric car programs have been working, and why they have stumbled. Mind you, it’s still early days for the Chinese electric car industry, and one thing is certain: China is the largest car market in the world, and it is making one of the most aggressive bets of any country on electric car development. In the long term, a robust electric car industry and domestic market will likely emerge.
BYD’s electric minivan

BYD’s electric minivan

China’s method of using its cities to test out local programs, which will later inform a national initiative, is one that has been used for decades. The country has tested out local economic innovation zones in this way and the magazine article calls China’s cities its “macro-laboratories.” The idea is that each region can have different system attributes, which can expose things that work and things that don’t work.

For example, the Beijing government used preferential policies like reducing car taxes, combined with a focus on industrial collaborations like a joint venture with Foton Motors, which is a union between BAIC and Daimler. The city of Shanghai adapted a rental EV model based on one from Bremen, Germany, while the local Hangzhou government also created a rental system; but one where people can rent the car and the battery separately. Shenzen pushed a more commercial approach to selling EVs, and created a financing leasing program with Potevio New Energy and China Southern Power Grid. Meanwhile, the city of Chongqing piloted fast charging stations.
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