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Dongfeng's electric delivery van
Pressed to meet EV mandate, automakers bet on electric vans
Yang Jian | 2017/10/13

SHANGHAI -- Two weeks ago, Beijing released the final draft of its carbon credit program. The mandate starts to take effect in 2019, one year later than the original schedule.

Despite the grace period, automakers still need to figure out what kind of electric vehicles they should produce and who would want them. And there is very little time to do so.

Some companies are considering a partial solution, such as selling electric vans to fleet operators such as courier service providers and the post office. More automakers likely will join them. 

A few years ago, several small Chinese automakers introduced electric delivery vans, but none sold well because their technology was second-rate and production capacity was limited.

That began to change this year when three major automakers -- Dongfeng Motor Corp., Changan Automobile and BAIC Motor Group -- jumped into the segment. 

They did so after Beijing announced plans in 2016 to impose a California-style carbon credit trading program to goad automakers to produce more EVs.

Under the program, companies would receive carbon credits by producing and selling EVs. Those who fail to do so would have to buy credits from other companies or pay stiff penalties. 

For Chinese automakers, electric delivery vans look like a pragmatic solution.

First, it is easier to package batteries in a commercial van than a passenger vehicle.

Second, range anxiety shouldn¡¯t be a big problem for fleet operators, who often have specific routes for their vans and know exactly how far they will go. 

Third, it is easy to perform regular maintenance on the EV fleet in their home garage. And lastly, EV vans can easily be recharged at night in the fleet owner¡¯s garage.

This year, production of these trucks has soared. In the first six months, 13,000 electric delivery vans were produced in China, up 91 percent from the same period last year, according to the Ministry of Industry and Information Technology. 

Now other automakers are entering the segment. 

Last month, state-owned Chery Commercial Vehicle Co. signed a joint venture agreement with Roshow Technologies Co. to assemble electric delivery vans in in the east China city of Wuhu.

Likewise, Ford Motor Co. says its commercial truck partnership in Jiangxi will produce electric vans.

When China¡¯s carbon credit program is implemented in 2019, EVs must constitute about 4 percent of an automaker¡¯s annual vehicle production. To make things more difficult, Beijing will phase out EV subsidies by 2020, thus dampening consumer demand for electric cars.

So the commercial truck market is starting to look like the auto industry¡¯s best hope for meeting China¡¯s EV mandate. Pressed for time, more global brands will join their Chinese peers to build electric delivery vans. 

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