American, European electric SUVs vie for attention at Shanghai auto parade

Business | 16 Apr 2019 12:52 pm

Automakers are showcasing electric SUVs and sedans with more driving range and luxury features at the Shanghai auto show.

General Motors, Volkswagen, China’s Geely and other brands today displayed dozens of models, from luxury SUVs to compacts priced under US$10,000, at Auto Shanghai. The show, the global industry’s biggest marketing event of the year, opens to the public Saturday following a preview for reporters.

Yesterday, GM unveiled Buick’s first all-electric model for China. GM says the four-door Velite 6 can travel 185 miles before the battery needs charging.

VW showed off a concept electric SUV, the whimsically named ID. ROOMZZ, designed to travel 280 miles on one charge. Features include seats that rotate 25 degrees to create a lounge-like atmosphere.

Communist leaders have promoted “new energy vehicles” for 15 years with subsidies to developers and buyers. That, along with support including orders to state-owned utilities to blanket China with charging stations, is helping to transform the technology into a mainstream product.

“People’s mindset and governmental policies are more encouraging toward e-cars than in any other country,” said Volkswagen chief executive Herbert Diess.

Electric car subsidies end next year, replaced by sales quotas. Automakers that fall short can buy credits from competitors that exceed their targets or face possible fines.

“Most of the traditional car makers are under huge pressure to launch NEVs,” said industry analyst John Zeng of LMC Automotive.

Last year’s Chinese sales of pure-electric and hybrid sedans and SUVs soared 60 percent over 2017 to 1.3 million, or half the global total. At the same time, industry revenue was squeezed by a 4.1 percent fall in total Chinese auto sales to 23.7 million vehicles.

That skid that worsened this year. First-quarter sales fell by 13.7 percent from a year ago.

Still, China is a top market for global automakers, giving them an incentive to go along with Beijing’s electric ambitions. Total annual sales are expected eventually to reach 30 million, nearly double last year’s U.S. level of 17 million.

Under Beijing’s new rules, automakers must earn credits for sales of electrics equal to at least 10 percent of purchases this year and 12 percent in 2020. Longer-range vehicles can earn double credits. That means some brands can fill their quota if electrics make up as little as 5 percent of sales.

Also today, Nissan Motor Co. and its Chinese partner displayed the Sylphy Zero Emission, an all-electric model designed for China. Based on Nissan’s Leaf, the lower-priced Sylphy went on sale in August.

Mercedes Benz displayed its first all-electric model in China, the EQC 400 SUV. The Germany automaker says it can travel 280 miles on one charge and can go from zero to 62 mph in 5.2 seconds.

Mercedes plans to release 10 electrified models worldwide, with most built in China, according to Hubertus Troska, its board member for China.

Some Chinese rivals have been selling low-priced electrics for a decade or more.

China’s BYD Auto, the biggest global electric brand by sales volume, unveiled three new pure-electric models last month. All promise ranges of more than 280 miles on one charge.

Last week, Geely Auto unveiled a sedan under its new electric brand, Geometry, with an advertised range of up to 320 miles on one charge.

Geely’s parent, Geely Holding, launched a joint venture with Mercedes parent Daimler AG in March to develop electrics under the smart brand. Geely Holding is Daimler’s biggest shareholder and also owns Sweden’s Volvo Cars.

Beijing wants to force automakers to speed up innovation and squeeze out producers that rely too heavily on subsidies. But the technology minister acknowledged in January that China faces a difficult transition as that spending is ending.

Keeping development on track “will be a challenge,” said Miao Wei, according to a transcript on his ministry’s website.

The shift creates an opportunity for fledgling Chinese automakers that lag global rivals in gasoline technology. They have just 10 percent of the global market for gasoline-powered vehicles but account for 50 percent of electric sales.

The end of subsidies should lead to dramatic changes, said Zeng of LMC Automotive. He said longer-range, feature-rich models from global majors will replace small producers that cannot survive without subsidies.

Electric vehicles “will be much more competitive,” said Zeng.

As the cost of batteries and other components falls, industry analysts say electrics in China could match gasoline vehicles in price and become profitable for manufacturers in less than five years.

EVs carry a higher sticker price in China than gasoline models. But industry analysts say owners who drive at least 10,000 miles a year save money in the long run, because maintenance and charging cost less.-AP

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