Batteries Drive China's Electric Car Sector into Future

Prospects for China's electric car sector received a significant boost earlier this year on the news that German car manufacturing giant Daimler AG and Chinese automaker BYD were teaming up to produce electric vehicles. The main attraction for the Germans to enter into this 600 billion yuan deal was to take advantage of BYD's experience in making batteries. And, as CRI's Dominic Swire finds out, it's this technology which is the key to driving the electric car industry forward.

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The race is on across the world for car makers to develop and mass produce electric vehicles. But one of the main factors holding this technology back is the challenge of designing a battery that is sufficiently safe and efficient.

While there are a number of companies making significant inroads into this technology, namely in the United States, Japan and Europe, many investors are now looking towards China. Although this country may not have a long tradition of auto manufacturing, some say, rather than a hindrance, this can actually be considered an advantage.

Andre Pietri is a managing partner of CELL Partners, a Europe based investment fund focusing on clean technology.

"Probably the future EV cars are going to be completely different than the ones we know in Europe or in the US today; and, probably it's going to be a reengineering which is possible only in countries which don't have this long legacy of knowing what is a good car, where a father tells his son 'this is what a car should look like."

Pietri says part of the reason electric vehicles, of the future will be so different from the cars we know today is because the energy use of today's cars are so inefficient.

"Simply, the proportion is crazy. Today you have an average 70 kilo passenger transported by a 1.5 ton car. It would make no sense to have a battery to motorise this kind of weight."

Pietri was speaking Monday at the 2010 China Cleantech Business Forum in Beijing, which brings together investors and business leaders from China and beyond. One of these was Larry Zhang, a partner at cleantech investment fund Tsing Capital, which is also investing in battery technology. He says the emergence of these new vehicles is likely to be seen in the public sector first.

"The barrier to make electric buses is a little easier compared to passenger cars... if we want to address issue of global warming I think buses will be one of the most important areas to develop."

With so much resources being poured into the development of this sector, it seems just a short matter of time before Chinese commuters will be hopping into electric powered vehicles.

For CRI, I'm Dominic Swire.