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Electric vehicles: Geely revs up, BYD drives into Hong Kong

New moves by Geely and BYD indicate the EV space is gaining momentum among China’s domestic automakers, providing a psychological boost for the sector.

Hong Kong saw its first electric taxis hit the streets on Saturday in a step towards reducing the city’s high levels of roadside pollution. Photo: SCMP

After making increasing noises about its intent to develop electric vehicles (EVs), domestic automaker Geely (0175.HK) is getting serious about the effort by moving one of its top executives into a new role overseeing its EV sales. Meantime, rival EV maker BYD (1211.HK; Shenzhen: 002594) has gotten its own new boost in the space with the launch of a new pilot program for its electric taxis in Hong Kong. Both developments are certainly positive for the sector, and indicate the Chinese automakers haven’t given up on their dreams of bringing EVs to both China and the world.

I’m no expert on EVs, but based on what I’ve seen and heard the current technology still isn’t quite ready for true commercialisation and will require another generation or two of new technologies before it’s ready for true mass market sales. But that said, perhaps BYD and now Geely are positioning themselves to become leaders in the space if and when that happens, alongside most major western players that have been in the market for more than a decade.
Let’s start with a look at the latest news from Geely, which has announced that Liu Jinliang has left his older role as head of the company’s car sales to focus exclusively on developing its EV business. In a bid to ease concerns that the move might represent a demotion, Geely is quick to add that Liu will retain his role as a company executive director.

I’m no expert on the inside workings of Geely, but recent signs do appear to indicate this move really does represent what Geely says, namely an effort to seriously develop its EV business. The company’s sales have been weak in the last few years as it lost share to more aggressive foreign players. But it’s done relatively well so far this year, with sales up 21 per cent in the first four months of 2013 as it works to revive its traditional car business. At its annual meeting last week in Hong Kong, Geely also said it expects sales growth to accelerate in the second half of the year as it introduces new models. That certainly doesn’t sound like the kind of performance that would merit a demotion for Liu.

Geely is also planning to roll out an electric vehicle model in the second half of the year, the EC7, hinting that Liu’s move might be related to a major push for the car. This latest move would come just three months after Geely announced a new joint venture to produce electric cars with Kandi Technologies (Nasdaq: KNDI), again emphasising the company’s intent to make a serious bid into the EV space.


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