China becomes electric vs. hydrogen battleground image

Auto giants like Volkswagen AG, BMW and Daimler see China’s future as being electric – encouraged by generous government subsidies – but that bet puts them at odds with some of their Asian rivals.

This is because while the vast majority of European carmakers were heralding the all-electric vehicle at the Guangzhou auto show this week, Toyota Motor and Honda Motor were unveiling hydrogen fuel cell cars at shows in Tokyo and Los Angeles. And Hyundai has recently announced plans to sell its hydrogen-powered ix 35 SUV in the US starting next year (the European model can already be found on select markets).

The two Japanese heavyweights plan to start selling their hydrogen vehicles in 2015, brushing off electric technology as being good enough only to power tiny city cars.

“Toyota believes the industry isn’t likely to come up with breakthroughs to make all-electric cars a viable solution any time soon,” said Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight. “Unlike China, some countries have taken a more flexible approach, rather than setting the path on one solution too early.”

One of the most ambitious in betting on electric cars in China, the world’s largest auto market, is Volkswagen. On the eve of the Guangzhou show, Volkswagen said its brands, including Volkswagen and Audi, plan to launch a total of more than 15 near-all-electric plug-in cars by 2018, many of which will be locally produced.

“We forecast high volumes in this area,” Jochem Heizmann, head of Volkswagen Group China, told reporters this week.

BMW and its local partner Brilliance Auto unveiled a jointly developed all-electric battery car in Guangzhou. The two companies plan to start leasing the car next year under a new jointly run China-only brand called Zinoro.

Daimler said it was also on track to launch an all-electric car next year under a new China-only brand called Denza, which the German company operates jointly with Chinese battery and car producer BYD Co.

The rush into all-electric cars comes as Beijing ramps up a program to put 5 million new energy vehicles – defined as all-electric battery vehicles and heavily electrified “near all-electric” plug-in hybrids – on the road by 2020. Very important, China this year has expanded the definition of new energy cars to also include fuel cell cars.

Via Reuters