World's First Plug-In Electric Car Goes On Sale Next Month -- in China

Go Slowly

In its bid to move into foreign markets, BYD will face a major speed bump. As Fortune reported recently, auto safety and emissions remain a big concern.

... with 2008 nearing an end, not a single Chinese-made car sits in a U.S. showroom - nor is there likely to be one anytime soon. China's ambitious plans to crack the U.S. market are woefully behind schedule. The reason: the country's cars still haven't met the emissions and safety standards necessary to export to the United States.

China's car exports are also on the rise -- 310,600 in the first half of 2008, a 70% increase from the same period last year, says the Chinese Ministry of Commerce. Still, most of those vehicles go to Latin America and Southeast Asia, which have lower fuel emission and safety standards than Europe and the US.

The safety of batteries could be a big deal-breaker. GM and Toyota say they are taking longer to perfect the safety of their lithium-ion batteries. The F3DM is undergoing Chinese government tests now, but how much more improvement will be needed before BYD can bring it stateside remains to be seen.

China's Raising Standards

Still, amidst a slew of concerns on product safety and desires to shift from a low-cost manufacturing economy, the Chinese government is serious about improving quality. This year, Beijing switched to the Euro IV emission standard, emitting a third the amount of sulfur, 50 ppm, as the previous standard.

And as it has raised fuel prices and introduced a 40% sales tax on large vehicles, the government has also been encouraging the auto industry and local governments to ramp up research and development of electric vehicles.

Caijing reports that Shenzhen, BYD's ambitious home base, has been at the forefront of such efforts.

In March this year, the Shenzhen city government won approval from the Ministry of Science and Technology for an electric-vehicle research project. Under the project, the city government will invest 50 million yuan to open three public transit lines that will be serviced by 10 hybrid busses. The government also plans to draft new regulations for electric vehicles and allocate subsidies to buyers.

Shenzhen-based BYD will head research and production for a fully electric sedan under its home city's new contract.

If the Chinese government were to subsidize purchases of new energy cars, BYD's CEO Wang Chuanfu said, the company might be able to ramp up annual production to more than 100,000 vehicles, bringing the price of the F3DM down by 20 percent.

Chinese automakers have already released some hybrid models, like Chery's $10,000 A3. But in a country extremely price sensitive, such cars must compete with models as cheap as $4,500. The Prius, the most popular hybrid in the world, is even more expensive in China than in the US. Due to heavy import taxes and its RMB 300,000 price tag, the car will probably only reach sales of 3,000 in 2008.

But as Automotive World notes, "Many analysts believe China could adopt electric cars faster than elsewhere, largely because of its size and comparative lack of reliance on petroleum for transport."

Futurama, Here We Come

Back in the United States, Detroit's big automakers are fighting for their lives while Americans either turn their backs or bite their fingernails over more economic meltdown.

But its morning in China. BYD, which stands for Build Your Dreams, says the technology behind the F3DM embodies "the design concepts of being Faddy, Faithworthy and Futuramic."

Whatever you say BYD. You've got our attention.

Via Caijing and BYD

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