Toyota Prius Threatens Buffett’s BYD in China Hybrid Shift image

Toyota’s Prius hybrid might be the winner in China’s hybrid shift strategy.

The policies which favored Toyota, Warren Buffett-backed BYD and other EV makers were aimed at helping the Chinese market vie for global leadership in a strategy expected to replace the vehicles that run on gasoline. But, as Chairman Mao Zedong put it, “seek truth from facts,” and the hurtful truth is that electric vehicles flopped. Consumer demand didn’t rise to meet the expectations, despite the financial incentives which cut to half the price for BYD e6.

Currently, there are 27,800 EVs on China’s roads, which account for less than 6% of the government’s target for 2015 and 0.02% of the total civilian fleet. Now China needs to promote other technologies and find other solutions for the choking smog affecting the country.

“We’re very anxious about worsening air pollution,” Miao Wei, industry minister and a three-decade veteran of China’s auto industry, said during last week’s annual National People’s Congress in Beijing. “I’ve never believed that you can gain global leadership in one leap.”

The government will now focus on increasing subsidies for hybrids, a plan which will be unveiled in the following months. Science Minister Wan Gang, a leading advocate for EVs, said that switching to electric vehicles might take longer than expected. More subsidies will offer Toyota the possibility to achieve in the country the same success the Prius hybrid enjoyed for 15 years in Japan and the US. Last year Toyota sold 362,845 Prius vehicles in the world, becoming the best-selling hybrid and the third among all car lines.