By on April 8, 2011

Call it synchronicity, ESP, or plain dumb luck. Yesterday, only half in jest, I called upon the city of Beijing to issue its sought-after license plates to buyers of EVs and hybrids.  Little did I  know that the day before, Beijing had decided to do just that. Well, no quite. No hybrids.

Beijing’s media, from Beijing Youth Daily to the China Securities Journal, all report that buyers of pure plug-ins, and pure plug-ins only, will enjoy privileges the regular Beijinger can only dream of: EV buyers will not have to win the lottery to drive a car, they can drive on any day of the week, and they pay no tax. Doesn’t sound exciting to you? It could very well turn Beijing into EV city. Here is why:

For several years, Beijing, the city with a population equal to that of Australia,  had been fighting an ever increasing traffic congestion. On any given day, 2,000 new cars were registered. Before the 2008 Olympics, an odd/even regimen was introduced. Depending on the last digit of your license plate, you had to leave the car at home every other day. The result? Second car purchases skyrocketed.

After the Olympics, the odd/even rule was abandoned. Instead, you had to leave  your car at home on one day of the week, again according to the last digit of your license plate, and according to a constantly changing schedule. The result? Even more cars. Last year, 700,000 cars were registered in Beijing.

By the end of last year, the city of Beijing pulled the emergency brake and handed down draconian measures.

  • Only 240,000 new cars would be allowed onto Beijing’s streets per year. One third of the 700,000 bought in 2010.
  • Applicants for a license plate had to enter a lottery. No plate, no car.
  • Cars from outside of Beijing were banned during rush-hour.
  • Existing plates could not be transferred with the car to another buyer.

As a result, the car business, both new and used, crashed in Beijing. In January, the first batch of 20,000 plates was awarded through the lottery. Only 2,000 of those resulted in car sales. The remainder became a wall ornament.  The most precious thing in Beijing is no longer a Maybach. It’s your own license plate.

Trading-in or selling your used car became next to impossible.  How can you sell any car if the buyer has to win the lottery first? There are whole sections in downtown Beijing where formerly glitzy showrooms are now boarded up. The formerly teeming car markets on 4th Ring Road are deserted. Car rentals suddenly boom.

Tension in Beijing became high. There were speculations about a face-saving tactical retreat by the city.  The new rule comes unexpected, but it is a stroke of genius. It’s dark green. It’s all about choice. Put yourself in the shoes of a Beijinger. I know, it’s hard, just try.

You have money. You flipped some apartments, and being the only child, you inherited from both sides. You want a car. Now here are your choices. You either want a regular car. Then you have to throw your name into a huge hat that already holds hundreds of thousands of names and hope for lady luck. Or you get an EV. You can drive it tomorrow. No tax. A healthy subsidy to ease the pain of the higher price. You can drive it on any day of the week.

EV or bicycle? Suddenly, EV or not EV becomes a no-brainer.

For city driving, the range of say a Nissan Leaf is plenty. Want to visit Grandpa in Qingdao? No problem. I already see huge parking lots or warehouses (roofs for the affluent) in neighboring Hebei province, where the Beijinger parks (and registers) his Fünfer BMW or Audi A7. On return, his Leaf, or whatever battery-operated cars the Chinese car industry dishes up, will be ready, washed and with a fully charged battery.  You think I’m kidding?

The Chinese are serious. China is about to invest $15 billion into the new energy vehicle industry, writes Global Times. China wants to have 5 million EVs on the road by 2015, writes  China Daily. If Beijing sets a precedent for other cities, then China’s 5-million-EVs-by-2015 target suddenly looks more reasonable that Obama’s 1-million-EVs-by-2015 target. If the future is electric, then China wants to be in the driver’s seat.

Two days ago, when the first articles came out, it was just a plan. Today, my Beijing contacts assure me that the plan has already been approved. Someone must be in a hurry.

Now, B&B, who would be best positioned to profit first from this sudden electric bonanza? Hybrids, even plug-in hybrids may not apply. Price is suddenly not so important, it only competes with other EVs, but it should be attractively priced. Who?

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27 Comments on “New Edict Turns Beijing Into EV City...”


  • avatar
    findude

    This is a great opportunity for someone, and it would be smart for the Chinese to make sure they get a big piece of the pie.  The dominant player in this market will develop a tremendous amount of relevant experience and user data within a couple of years and be uniquely positioned to sell EVs to the rest of the world. I’d expect this experiment to have a greater effect on the development of EVs and battery technology than anything else to date.

  • avatar
    Athos Nobile

    Nissan, Renault, BYD, Mini… now I understand why all the EV prototypes from BAIC. Volvo. Even Saab might benefit from it.
     
    Whoever has an EV ready ya will.

  • avatar
    eldard

    Wake up, Toyota! And crush the rest.

  • avatar

    new bike $100, new car $100,000…ability to drive it, priceless.

  • avatar
    aristurtle

    Who will benefit from this? Everyone in the area. The air in Beijing is nearly unbreathable. Emissions controls only go so far. I like a nice gas-burning engine as much as the next guy but I like oxygen a good deal more. As more EV plates get issued, congestion dictates that the odds against you getting a plate for your gas-burning car will be worse and worse, until most of the gas-burners are out of the city. This won’t eliminate the city’s air pollution problem but it will put a decent dent in it. And yeah, out in the country people will rent gas burning cars for long trips, but out in the country it’s not as big a deal.
     
    Also, it will be an opportunity for companies developing charging stations to get some real-world data. Lots of companies have electric vehicles. Not as many have a secure way of charging them on a city street rather than in a suburban garage.

    • 0 avatar

      The air is Beijing is quite breathable now. In 2007, it was thick enough to cut bricks out of it. Ever since a whole lot has been done. The heaviest polluters weren’t cars, but industries. Moved out of town. Then, older cars which polluted heavily were removed. These days, if you have an out of town tag, you can’t drive into Beijing without an emission check. It’s night, I can see the stars in the sky. In 2007, I could not see the next building.

    • 0 avatar
      aristurtle

      My information is out of date, I guess; the last time I looked at the data was 2008 or so, when the city was still neck and neck with Mexico City for the award for “least breathable atmosphere”. Still, if this works in Beijing, other cities nearby may pick it up.

      • 0 avatar
        tekdemon

        You have to realize that in China 3 years is the equivalent of like 2 decades everywhere else in terms of change.  Whole cities pop up with hundreds of skyscrapers in only a few years, and they build highways at lightning speed.  When you have an authoritarian government that’s flush with cash, whatever they want to get done basically gets done.  Polluting factories and mines basically get forced to shut down and clean up their act.  Basically there’s never any arguing over any issues-when the government wants to deal with something it throws money and insane manpower at it and the next thing you know…it’s done.
        They’re really good at setting longer term goals and making change happen over there. Sure there’s downsides to how things are done there and still quite a bit of corruption especially at the local government level, but there’s plenty of upsides too.

      • 0 avatar
        charly

        It is not China, it is the phase in their economic development.

    • 0 avatar
      SVX pearlie

      The big thing is that the Chinese have been working on the environment for the past 5 years, but it’s not been getting a lot of press in the US. Hence, “surprises”, like how breathable the air is in Beijing.

      Of course, if China hadn’t hosted the Olympics in 2008, things would have been different.

      IMO, the Olympics were a major turning point within China, simply because China started measuring themselves by First World standards, not Third World ones.

      • 0 avatar

        The Chinese are petrified of the effects of climate disruption. Long before Pres O picked him as head of the office of sci and tech policy, John Holdren was relaying this from his trips to China. If/when the glaciers melt in the Tibetan plateau, rivers critical to Chinese agriculture will dry up. But of course the Chinese are subject to a lot of conflicting forces (aren’t we all?), and  the Olympics certainly gave them a huge push towards cleaning up the air.

  • avatar
    twotone

    I lived and worked in Mexico City for a year in the early 1990′s when they tried the no drive number plate idea with the same results. The rich bought more cars with different plate numbers and drove every day. 22 million people living at 7.500 feet and surrounded by mountains created the nastiest pollution I’ve ever seen. No EVs were available at the time. It will be interesting to see if other congested cities (London?) copy Beijing’s model. Personally, I prefer a good public transportation system.

  • avatar
    ClutchCarGo

    It’s amazing what can be accomplished when the govt doesn’t have to worry (much) about voter backlash and can point the market in the direction that it chooses. The same thing applies to most industrial and infrastructure development in China: No problems siting new factories or high-speed rails lines.

    • 0 avatar
      SVX pearlie

      Except, for the most ironic thing: Chinese officials can be held *more* accountable than any American official.

      Question for you to think about:

      - When was the last time an American official was tried and executed for “white collar” criminal corruption?

      Go on, take your time, I’ll wait.

      In the US, you pull a fast one, screw things up big time, they slap you on the wrist, take away whatever money they can get their hands on, and put you in Club Fed for a couple years. In China, they shoot you.

      That’s a pretty high level of accountability.

      I think we could use more accountability in America.

      • 0 avatar
        ClutchCarGo

        First, I think that the death sentence for corruption is pretty excessive, even if effective. Second, accountability in China is severely compromised by their opaque justice system. Do you not think that the better connected a Chinese official is politically/financially, the less likely he is to avoid prosecution? And finally, taking away your money and putting you in Federal prison, even low security prisons, is not a minor penalty. While not as ugly as high security prisons, I’ve heard first hand reports about life in Club Fed and it’s not to be taken lightly. Here in IL, our most recent convicted former governor has to sit in jail while his wife of many years dies of cancer.

        The accountability that matters here is whether the Chinese citizens who are impacted by govt policy moves have any serious means of redress for their loss.

      • 0 avatar
        SVX pearlie

        On net, I think that the average poor Chinese has about as much power as the equivalently poor American. Quite frankly, our government doesn’t appear to be any more accountable to our electorate. Think about our security apparatus – the words “terrorism” and “child pron” give the government carte blanche to search or seize whatever they like without review or redress. Our President just unilaterally and unConstitutionally declared war against Libya. Our goverment is about to shut down because nobody passed a budget. And our Courts have gone towards a level of Legalism which is impenetrable to the layperson.

        From what I see, our government is only accountable to those with vast amounts of money and power. From a man-in-the-street standpoint, I don’t think there’s any difference whatsoever.

      • 0 avatar
        ClutchCarGo

        While I agree with your big picture points, even the poorest of us have a constitutional guarantee that the govt must compensate us for taking our property, and we can challenge the amount they offer if we wish. In most cases, we even have a lot of power to stop a project that stands to take our property if we don’t like it. These things are not available to the average Chinese citizen.

        The interesting question is which system is better, the American or the Chinese? The US prioritizes the individual over the collective good while the Chinese prioritize the collective benefit over the individual. As an individual I prefer the US system, but much of the astounding advancements in China show what can be accomplished when the govt can enable sweeping changes without having to first ask permission. Can you imagine the US govt unilaterally deciding to clear a right-of-way for a new high speed rail line like they’re building in China? Simply trying to close a grade crossing to faciltate modestly higher speeds on existing rail lines results in months or years of fighting by those who use the crossing.

      • 0 avatar
        SVX pearlie

        In the US, those laws are purely on paper, and do not protect the common man. Did you not see the recent majority opinion of the Supreme Court saying that a man wrongly convicted and imprisoned due to prosecutorial misconduct does not warrant damages?

        Even when compensation is offered, it doesn’t have to be at fair market value, and homes can be condemned to favor deep-pocketed private investors with retail desires.

        The idea behind the Constitution and Bill of Rights is admirable, but fails mightily in practice. Similarly, the Chinese system is terrible in theory, but quite livable in the real world. The Chinese focus on getting the right result, while the US focuses on getting the right appearance.

  • avatar
    MarcKyle64

    My prognosticator spidey sense says that by 2040, gasoline powered cars will not be allowed into any city above 50,000 people in the USA.  Everyone will own EVs and rent hybrids for that still all-american road trip.  Possible exemptions for classic cars and motorcycles under 250cc.

    • 0 avatar

      Unless EVs or some alternative is as flexible as the internal combustion engine, the notion of no gas cars in any city above 50k is ludicrous. For one thing, a lot of small cities are in areas where people have to travel regularly beyond the range of EVs. I can’t imagine people in Fargo, ND allowing something like this. After all, they have to be able to get to Bismarck without having to wait an extra hour while the Leaf charges. And if EVs ARE as flexible by then, such draconian measures won’t be needed.
      But this should be a lesson about the importance of stabilizing the US population. The more crowded things get, the more regulation is needed, and tolerated. By 2050, the US, now ~309 million, will have nearly half a billion, according to current projections, the growth driven largely by mass immigration. If you’re interested in stabilizing the population, go to numbersUSA.com.

      • 0 avatar
        dhanson865

        “a lot of small cities are in areas where people have to travel regularly beyond the range of EVs”
         
        correction: beyond the range of EVs that exist in 2011.
         
        You might have noticed he was talking about 2040 aka roughly 30 years from now. Don’t you think EVs would have improved at least a little bit by then?
         
        Besides nobody said you couldn’t use some other form of fuel for long range trips, just switch vehicles at the edge of town or get on mass transit.
         
        That’s all assuming society doesn’t collapse before then but I do expect to live to 2040 so I’ll try and have some popcorn warmed up around the good parts.

    • 0 avatar

      Come on. We had agreed on 2050. Reneging again ….

    • 0 avatar
      SVX pearlie

      50,000?

      You just banned all ICE from DC to Boston, and south of Fresno.

      Guess I gotta keep my “classic” car.

  • avatar
    MarcKyle64

    I’m figuring that EV cars will have a range of about 200 miles by then, so they’re a decently ranged grocery getter and commuter.  As I said in my post, hybrids will be rented for longer trips.


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