China a great market for green vehicles as its urban air pollution worsens

Traffic in ChinaThe Chinese government will soon release details of its plan to remove six million vehicles from its roads as air pollution worsens. The government recently acknowledged failing to meet its pollution reduction goals for 2011-2013 as its cities continue experiencing dramatic growth trends. Chinese cities such as Beijing have strict emissions standards in place, but enforcement has been lax and has not really addressed the problem.

Chinese citizens have been moving from small towns and rural communities to mega-cities and buying their first-ever cars; and Chinese industries have been acquiring their share of passenger and commercial vehicles. There are about 240 million vehicles in operation there today, with half of them being passenger cars.

The six million vehicles will likely be older – registered before 2005, according to the Chinese government. The US government addressed this problem with the successful Cash for Clunkers program in 2009, where owners of nearly 700,000 older, low mileage vehicles were given cash rebates as they traded in their gas guzzlers for newer, more fuel efficient vehicles.

In China, the first five million vehicles will be taken from Beijing, Tianjin, Shanghai, and Guangzhou and surrounding regions; the government will later announce where the remaining one million of these vehicles will come from. The government’s plan will also likely address bringing the cleanest grades of gasoline and diesel to Beijing, Shanghai, and other major cities where most of these vehicles subside.

China has been adopting other policies and programs to deal with air pollution and carbon emissions as its vehicle sales hit record numbers (it’s the largest new vehicle sales market in the world today). Taxi fleets and public buses in major cities are now required to switch to natural gas or battery power. Electric vehicles (EVs) have been a focal point of government policies, though these sales numbers have so far been slim.

BMW Group and Tesla Motors think that will be turning around sometime soon. Karsten Engel, head of BMW’s China operations, expects China to become the world’s biggest market for EVs in at most five years. More charging stations will be deployed and government policies are promoting clean, light vehicles to reduce its air pollution problem.  “We expect that the Chinese car market for electromobility will become the largest markets for those cars in a few years,” Engel said. “Because you have supply now, there are cars coming on the market. We are coming with ours, others are coming as well.”

Tesla CEO Elon Musk recently traveled to China to deliver the first eight Model S sedans that were sold to Chinese owners. Musk thinks Tesla’s future in China looks very good – and other automakers are planning on bringing several new EV models to China in the near future.

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