The city of Shanghai has teamed up with Hertz and General Electric (GE) to become the International Electric Vehicle (EV) Pilot City. This pilot program will serve as a model for other regions in China, will constitute valuable market research for GE, and is a chance for the public to be among the first to try out this new technology.
GE will install charging stations and provide necessary upgrades to the electrical grid in the Jiading district. Hertz will provide a fleet of electric vehicles in conjunction with BYD Automobile, a leader in EV production. The city is expected to get its first glimpse of the cars on September 21, 2011 at the Shanghai Automobile Exhibition Center.
The Jiading district of Shanghai consists of seven towns housing a population of over 500,000, people with an additional transient population of some 750,000 others. The Chinese government chose Jiading as the pilot city for its high-traffic. The nearby Shanghai Hongqiao International Airport, the Shanghai University campus, and a host of tourist attractions–from an 800-year-old Confucian temple to a Grand Prix racetrack–draw a diverse group of people to the area each day.
China’s Minister of Science and Technology announced in May of 2011 that the district would become a demonstration zone. The recently-formed GE-Hertz partnership will expand the program beyond test drives to real-life use. All eyes will be on Shanghai, as GE, Hertz, and the Chinese government closely monitor the program to learn about charging patterns, market needs, and consumer feedback.
Hertz already offers electric vehicle rentals in the USA and Europe. This will be their first EV test program in China, which is a rapidly developing nation. The demand for cars continues to grow exponentially as more and more of the population qualify as “middle class.”
In 2009, China became the world’s largest automobile manufacturing and consuming country and in 2010, the Chinese Ministry of Public Security reported 199 million registered vehicles in the country. The Chinese government is hopeful that other cities will adopt the Jiading model, and that China can be a pioneer in electric vehicle adoption.
A McKinsey & Company market study of electric vehicles in Shanghai predicts that electric vehicles will represent 5% of new car sales by 2015. McKinsey expects that number to triple to 15% by 2020 and reach as high as 50% by 2025. There is some concern that the small size of electric vehicles will limit their marketability within Shanghai, but this remains to be seen.
The Jiading Pilot Program will certainly put to the test some of the suppositions made by the McKinsey study about public opinion and adoption hurdles. Focus groups, as an example, indicated that unfamiliarity with EV technology will create concerns about the range of travel (range anxiety), availability of and access to charging stations, and the stability of the technology. Real-life test driving and renting of these vehicles may help address these concerns.
