Chinese cities open up green car markets

Three of China's biggest cities are helping consumers pay for a range of electric cars, heeding calls to encourage the sale of green vehicles that the government sees helping tackle pollution.

China's smoggy skies topped the agenda at the annual parliamentary session this year, while Premier Li Keqiang in January demonstrated the importance of green cars by visiting a factory of BYD Co Ltd, maker of the e6 pure electric car.

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The government wants to put 10 times more e-cars on the road by next year but traffic management is under the remit of local authorities, and many cities including Beijing have not had the framework to deem the vehicles roadworthy.

Tianjin lacked the means to issue license plate numbers for e-cars, while in Shanghai, technicalities in traffic management rules meant only Shanghai-made vehicles were eligible for local subsidies.

But the cities last month said they would subsidize purchases of pure electric and plug-in hybrid cars from Chinese makers including Warren Buffett-backed BYD, SAIC Motor Corp and Anhui Jianghuai Automobile Group Co Ltd (JAC Motors).

Any sales rise will add to a population of 50,000 new energy vehicles (NEV) - defined in China as electric, plug-in hybrid and fuel cell - well short of a government target for half a million by 2015 and 5 million by 2020.

"This is the goal to strive toward, with the numerical targets putting pressure on car makers," said Luo Xing'an, secretary general of the Guangdong Automobile Association.

Many other industry executives regard the targets as impossible, but China could edge closer if more cities broaden subsidies for which in many instances only locally made cars have been eligible.

BYD, for instance, sells most of its electric cars in its home of Shenzhen, where more than 800 taxis are its e6. The city offers subsidies for NEVs provided they are capable of 300 km per charge - criterion only the e6 satisfies. That effectively shuts out cars such as SAIC's Roewe E50 and JAC Motors' iev.