Green Vehicles May Face Cost Barrier in China

Just the Facts:

• Chinese consumers would like to buy green cars.
• A survey in Shanghai found that 75 percent said they intend to buy a "new energy" vehicle within three years.
• High EV prices may be a deterrent.

SHANGHAI, China — Chinese consumers indicate a strong intention to purchase electric vehicles. However, their decision to buy may be put off by exorbitant prices, under-developed infrastructure and nagging safety concerns, according to a survey revealed this week.

A survey of 606 auto buyers in Shanghai by research firm Ipsos found that 75 percent of them said they intend to buy a "new energy" vehicle within three years.

In another survey of 1,478 vehicle owners and potential buyers nationwide, the same proportion expressed buying interest and cited low operating costs and environmental benefits as their reason, according to Nielsen Co.

"The electric vehicle is only in its infancy, but Chinese consumers already have high awareness of it," said Jia Zhuang, director of consumer research at Nielsen China.

Auto manufacturers have nearly universally shown enthusiasm about producing green vehicles as concerns about global energy and pollution rise, but sales of EVs and other environmentally friendly cars in China have been limited, largely due to quality worries and high prices.

"To effectively convert intention into action, it is important for manufactures to understand consumer demand," Zhuang added.

Ipsos's research found battery-gasoline hybrid cars top consumers' buying lists. Most consumers expect green cars to sell for the equivalent of about $16,000 and $22,000, or 11 to 15 percent more than a gasoline-powered vehicle of the same type.

Wider acceptance by consumers of new-energy vehicles has been driven mainly by the influx of new models as carmakers compete to lead the fledging segment. General Motors will launch its Chevrolet Volt EV in China next year, while SAIC Motor plans to roll out its first self-developed hybrid car this year.

Inside Line says: Once automakers crack the price problem, it should be smooth sailing for EV sales. — Vivian Jin, Correspondent