Auto parts makers line up for slice of electric vehicle

0 CommentsPrint E-mail China Daily, May 13, 2010
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As a promising future market for environmentally friendly vehicles, China has become the battlefield for international automobile parts manufacturers to wrestle for market share in the electric vehicle sector.

"The car of the future will be the electric vehicle - there is no doubt about that. Bosch is devoting substantial research efforts to the electric power train and batteries," said Uwe Raschke, member of the board of management for the Bosch Groupin charge of Asia-Pacific market.

"Whilst we expect new and existing drive train technologies to be present in the market in parallel for many years, electric vehicles will continuously gain market share, especially in China."

In addition to Bosch, an auto parts maker with over 30 years of experience in new energy vehicle technology, US industry newcomer Better Place, an electric vehicle services provider established in 2007, is also focused on the China market.

"With only 2 percent of China's population owning cars and 80 percent of sales in 2009 to first-time car buyers, China has the opportunity to create and lead an entirely new category around clean transportation," said Shai Agassi, founder and CEO of Better Place.

The technology company recently signed an agreement with Chery Automobile Co, the country's largest independent auto producer and exporter, to collaborate on electric vehicle technology in the world's largest auto market.

Under the terms of the agreement, Better Place and Chery will jointly develop switchable-battery, electric vehicle prototypes with the goal of securing regional government electric vehicle pilot projects and provide consumers with affordable electric cars.

"We are also looking for cooperative opportunities with other Chinese automakers to develop cars that use our network of electric vehicle battery switch stations and charging spots," said Agassi of Better Place

China has set an objective of becoming the largest electric vehicle developer and manufacturer in the world, enabling the country to leapfrog internal combustion engine technology and go straight to electric transport.

As the world's second-largest consumer of oil behind the United States, which historically has led the combustion-engine-vehicle market, and ahead of Japan, the leader in hybrid technology, by 2020, China is expected to import 65 percent of its oil needs.

According to research by HSBC, China's share of the global electric vehicle market will grow from 2.7 percent this year to 35 percent by 2020. During this period, China will overtake Japan by 2016 and the US by 2019 in dominating the global electric vehicle market.

A recent survey conducted by consulting firm Ernst & Young found that 60 percent of respondents in China expressed interest in purchasing a plug-in hybrid or electric vehicle within three years, a figure nearly five times higher any other country surveyed, including the US, Germany and Japan, indicating that China may have strong electric vehicle sales potential.

Moreover, China's long-expected policy on subsidies for private purchase of new energy vehicles is likely to be announced at the end of this month, which will definitely spur sales of electric cars.

Cheng Qingquan, chairman of the World Electric Vehicle Association, said not only automakers but also parts manufacturers should shoulder the responsibility of manufacturing high-performance products at reasonable prices, to help speed up the development of the sector in China.

Seeing the huge potential, "we have taken action by starting cooperation with Chinese customers to develop the components they need for their electric vehicles", Eugenio Razelli, CEO of Italian parts maker Magneti Marelli, told China Daily.

The company plans to locally produce its electric motor generator and power inverter, two important components in an electric vehicle system, in its new factory located in Wuhu, Anhui province.

"Our significant upfront investment in this business area is in fact a valuable long-term investment in the future," said Peter Pang, president of Bosch (China) Investment Ltd.

"With localized components, our hybrid and electrification business division will cover the full power and torque ranges of the Chinese hybrid electric and pure electric vehicle market for motors, power electronics and battery systems."

The engineers under Bosch's United Automotive Electronic Systems have just started to provide local engineering, manufacturing, purchasing and sales capabilities in China.

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