China gets all wishy washy when it comes to hybrid & plug-in cars

Fans of cars like the Chevy Volt and Nissan Leaf are a passionate bunch. They take to social media sites to discuss waiting lists, charging stations, and the impact of the government subsidy on their tax returns. People like free money, something the US government hopes will spur the adoption of cleaner cars and stimulate competition. Over in China, the government is still making up its mind about the future of hybrid and plug-in cars.

According to a study by Ernst & Young, prospective buyers in China are crazy for cars powered by cleaner technology. Sixty percent would consider purchasing a plug-in or hybrid vehicle, five times that of buyers in the US. Major factors that influenced their decision were gas prices, environmental impact, and government incentives.

The problem is that there aren’t any government incentives to help purchase hybrid or plug-in cars for the general public. The Chinese government has used car buying subsidies to great success in the past, though. Their previous move to encourage citizens to buy smaller cars boosted national sales almost fifty percent in one year.

The absence of a subsidy program makes cheaper gas models look very attractive to the entry level consumer. For example, Toyota markets a hybrid and gas version of their popular Camry sedan in China. The gas powered version has a sticker price of 189,800 yuan (about $28,000) and the hybrid is priced at 319,800 yuan (about $47,000).

Beijing claims that they are working with carmakers to roll out the subsidy program later this summer. They hope the plan can lift the estimated 40,000 plug-in and hybrid cars that will be sold in 2010 to an astonishing 300,000 in 2011.

Even if the program has a major impact on sales, the subject of China’s power system needs to be addressed. Coal is the primary source for the nation’s electricity that will power many of these cars, and therefore the plan will get rid of auto emissions only to increase those from coal. China needs to back away from a “rob Peter to pay Paul” situation and use their increasing level of strength in the area of green technology to make a real and honest change.