Ronnie05's Blog

China’s new Eco-Drive to Clean Energy, Sustainable Environment transport solutions

Posted in The Cars of the Future by Manas Ganguly on October 16, 2013

Urban growth with special attention to sustainable development and multi modal transportation is the next big opportunity in transportation systems. Electric vehicles with disruptive quick battery exchange technologies are the key to the future. Tesla is one of the most important examples in the this space. But, the real sustainable and price sensitive solutions could be from China.

The PRC has been undergoing a significant transitional phase with special economic zones opening foreign trade to many cities including Shenzhen, Tianjin, Hainan Island and most recently the Waigaoqiao free trade zone in western Shanghai. This change in economic structure has sparked massive development and urbanization of Chinese cities. It is expected that over 70% of the population in China will live in major cities by the year 2035, compared to about 25% in 1990. This rapid urban development has been followed by a list of social and environmental issues.Most cities have been formed around the development of massive automobile infrastructure which puts heavy demand on scarce petroleum resources, creates congestion issues, and results in severe degradation of environmental air quality. In order to prepare for continued growth and work toward the resolution of some of these emerging issues, government policies and business models are taking aim at creating sustainable vehicle transport models that utilize existing infrastructure.

With that back ground, Electric vehicle manufacturer in China, Kandi, is developing an electric vehicle sharing and leasing model to help four primary environmental crises; fossil fuel energy demand, pollution, traffic congestion and parking.While this business model will not completely solve these issues but has the opportunity to incrementally contribute to their resolution over time. Kandi has also readied a couple of cars working on electric energy – Kandi’s “low end” JN6290EV model from scrap metal and “mid end” JL7001BEV Panda. The compact size, easy maneuverability, quick acceleration and lower operational cost of running make these cars a commuter’s dream.

But what is novel to Kandi’s business model is that Car share program from Kandi. Once a customer buys a car from Kandi – he would be entitled to a unique car sharing program. He could just drive into any of Kandi’s Car share garages exchange his car for another car and drive off. The cars deposited by the users are automatically charged while idle in their slot. One also has the option of getting a battery swap done without changing the car. Kandi’s management is in the process of making many such garages to support its customers.

Kandi EVs

What also works to the benefit of a company like Kandi is the sponsorship from the administration. The government recognizes the need to implement sustainable energy strategies and modify the existing paradigm of energy and transportation throughout China. State Council policy supports the EV business model by offering up to a revised 60% subsidy on purely electric vehicles. The subsidy policy requires a 30% market share for companies that come from other provinces. This market sharing policy should allow Kandi to gain footing in other major cities. This combination of demand and supply side management policies are a major step in the right direction for transportation in China. The car share model is funded in such a way that it can also operate without a subsidy package and depends mainly on land availability.

Kandi 3

Beijing is on record as one of the most polluted cities in the world and Kandi’s EVs will not help better this status substantially in the next few months – however, it does promise to take off some load from the conventional energy driven options in the next few years to come. WHile the operations at Kandi are at a pilot stage, scaling up is a challenge and if addressed correctly, individual vehicle demands will be encouraged to slow down significantly.

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