To address growing problems with traffic congestion, energy efficiency, emissions and energy security, China is pursuing diverse Cleaner Transportation solutions ranging from alternative fuels to electric vehicles.
Rapid growth of China’s transportation sector has led to major issues, including increased vehicle emissions, oil use and road congestion. In 2010, 18 million vehicles were sold in China, making it the world’s largest automobile market. Although China has already far exceeded the high-speed rail accomplishments of many developed countries, the government has ambitious plans to expand the industry further. Government, industry and private investors are making sizable investments in the earlystage development for electric vehicles, batteries and alternative fuels; however, the government’s aggressive targets may prove unrealistic.
The China Greentech Initiative developed four in-depth Opportunity Assessments for the Cleaner Transportation sector in 2010:
- China’s Emerging Electric Vehicle (EV) Ecosystem
While growth prospects for China’s EV market are substantial, the nascent market faces major challenges, including inadequate charging infrastructure and high battery costs.
The government has set ambitious growth targets for the EV market, aiming to have 5 million EVs on the road by 2020; however, the industry faces many hurdles. Government-led pilot programs are the main near-term market driver, supported by a new EV development plan and charging standards. Technology constraints, high battery costs and the lack of charging infrastructure in pilot cities all pose major barriers. Unlike in more developed countries, low-speed EVs may serve as a bridge for the eventual commercialization of high-speed electric vehicles.
- Electric Vehicle Battery Market Evolution
Over 60 Chinese battery makers have set their sights on EVs, and while technical challenges abound, government support and industry optimism remain strong.
Even as lithium-ion battery manufacturers vie for a share of China’s early-stage EV battery market, few orders from automakers and numerous technical challenges await the victors. Major obstacles include weak R&D capabilities, lack of automated production methods and difficulties in vehicle integration. Government and investor funds continue to flow into the sector, suggesting optimism that these barriers can be overcome.
- Alternative Fuels for Road Transportation
Ethanol, natural gas and methanol are the three most widely adopted alternative transportation fuels in China today; however, breakthroughs are needed in feedstock supply, technology development, infrastructure rollout and user acceptance to progress further.
The government continues to promote a full spectrum of alternative fuels, yet they account for only 3% of the current market. Ethanol, natural gas and methanol have developed rapidly over the past five years, but still face major development challenges, including feedstock, technology, infrastructure and user acceptance. Other alternative fuels appear less promising, at least in the near term.
- Rapid Growth in Cleaner Rail
Rapid economic development and urbanization intensify China’s need for greater rail capacity, and the government is responding to the challenge.
In response to the mounting need for more long-distance freight and passenger capabilities, China has embarked on a major expansion of its already extensive rail network. Metropolitan systems are also undergoing a makeover as subway and light rail coverage expands dramatically. By the end of 2010, China’s rail network reached 91,000 km, making it the second largest in the world, with plans to grow to 120,000 km by 2020. China is also home to the world’s largest highspeed rail network, with 8,000 kilometers constructed by 2010, and 16,000 kilometers planned for 2015—equivalent to the world’s total to date.