Alliance drives promotion of electric cars

By Wan Zhihong and Li Fangfang

BEIJING - An alliance of sixteen of the largest State-owned companies wants to accelerate development of electric vehicles in China, a move which underscores the country's ambition to be a world leader in new energy vehicles.

The alliance, formed on Wednesday, is gearing up to invest 100 billion yuan ($14.7 billion) on electric vehicles by 2012, according to media reports.

Guided by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), the alliance was formed by almost all the major players in the related sectors, including the country's top three oil majors, top two power grid operators, and two major automakers - China FAW Group Corp and Dongfeng Auto Corp.

The alliance aims to speed up research and development in vehicles, fuel cells and charging systems, as well as setting some unified standards, said SASAC Minister Li Rongrong.

China has already made some progress in areas like auto parts and fuel cells, and should take further steps to build internationally competitive Chinese electric car brands, Li said.

Early in 2008, the central government launched a national campaign aimed at getting 1,000 electric vehicles on the roads in at least 10 cities each year to encourage people to buy electric cars.

In June, the Ministry of Finance kicked off an incentive policy in five pilot cities - Shanghai, Shenzhen, Hangzhou, Changchun and Hefei - providing subsidies of 60,000 yuan for a pure electric vehicle, and 50,000 yuan for a plug-in hybrid vehicle.

Chinese automaker and batterymaker BYD, a company which Warren Buffett has invested in, launched its first battery-powered car in 2008 and formed a joint venture on electric cars with German automaker Daimler in March.

The consulting firm McKinsey & Company said the US is the most likely to spearhead a movement toward electric cars from gasoline-driven cars.