China Charges Up: The Electric Vehicle Opportunity October 2008 Paul Gao Arthur Wang August Wu The authors wish to thank Glenn Leibowitz and Joyce Hau for their contributions to this report. China Charges Up: The Electric Vehicle Opportunity 3 Faced with high energy costs and rising consumer and government concern over the fate of the environment, the world’s automakers are stepping up investment in the development of alternative powertrain technologies that promise to substantially cut fuel consumption and reduce greenhouse gas emissions. Much attention to-date has focused on advances by Japanese and American automakers in the development of hybrid and battery electric vehicles. Toyota’s Prius has emerged as the best-selling hybrid car in the world. Tesla Motors, a US-based start-up, has launched its first battery electric vehicle, the Tesla Roadster. By the end of 2010, GM plans to launch its much-touted Volt hybrid, while Chrysler has recently announced similar plans. As the media shines its spotlight on technological advances in more developed markets, China is quietly laying the foundation to e a global contender in this emerging industry. Already the world’s second-largest automobile market, China is set to overtake the United States as the world’s biggest by 2030. If China’s car fleet grows at the current rate of 12 percent a year, another 270 million vehicles will be added to China’s roads in the next 25 years. By 2030, the total number of vehicles could reach 287 million – or about 30 percent of the world’s automobiles by then. Unless China adopts newer technologies that are substantially more fuel- efficient and environmentally-friendly, such a large automobile fleet will place enormous strain on energy resources and the environment. Assuming the continued predominance of gasoline and diesel-powered automobiles, China will need to import billion barrels of oil to fuel its domestic automob
