China mulls $16 billion EV charging fund

Article by Christian Andrei, on August 31, 2014

China is mulling to provide up to CHY100 billion ($16 billion) in government funding to build electric-vehicle charging facilities and spark demand for green cars, two people privy with the matter told Bloomberg, adding that the policy will be announced soon. This increased financial support from the government would provide a tailwind for carmakers trying to battle consumer concerns over the price, reliability and convenience of EVs.

The charging fund, once online, would build on the tax breaks that China has announced to battle pollution and cultivate its local EV industry. China local EV industry includes BYD Co. and Kandi Technologies Group Inc. BYD, partly owned by Warren Buffett's Berkshire Hathaway Inc., said earlier this months that its new-energy vehicle sales grew six-fold in the first half of 2014, thanks to favorable government policies.

The Chinese government has recently rolled out "unprecedented" favorable policies for EVs, as prompted by worries like energy security and pollution, according to BYD Chairman Wang Chuanfu. He added that EVs are facing a lot of obstacles, including charging infrastructure.

BYD and Daimler will start selling their first joint electric car – Denza -- next month in Beijing, Shanghai and Shenzhen. BMW Group, which will sell its i3 in China this year, is expecting the country to become the largest market for EVs in the world within five years as it becomes host to more charging infrastructure and as the government promotes cleaner cars.

Ashvin Chotai, managing director of researcher Intelligence Automotive Asia, remarked to Bloomberg that charging infrastructure and EV growth is a “chicken-and-egg situation," saying that there has to be a gradual process to scale up both.

Topics: china, electric car

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