China extends “cash for clunker” policy to year-end to fuel auto sales

EV Plan as Energizer
With sliding auto sales following the end of the governmental sales stimulation policy in the first quarter, Brazil plans an electric vehicle project to bolster its auto industry which has grown sharply over the past few years, and surpassed the U.S. as the world’s fifth largest sedan producer last year, when Brazil produced 2.57 million sedans versus 2.24 million in the U.S.


The EV plan, which was originally to be announced in the summer but will be delayed until fully worked out, is to be drafted by the finance minister Guido Mantega and minister of science and technology Sergio Rezende, including establishment of an EV R&D Center, tax deduction for EV makers, and so forth.

More time is needed to work out all the details perfectly, said Brazilian president Luiz Inacio Lula da Silva, promising the government’s determination to develop EVs as a national industry.

The Brazilian auto industry has rolled ahead quickly in recent years, mainly due to the governmental policy to develop the auto sector.

China Continues “Cash for Clunker”
China’s “cash for clunker” policy, originally to expire in May, will continue to the year-end to fuel auto sales, which has sagged since April from the record monthly high of 1.7 million vehicles in March.

The Beijing government’s cash for clunker program, originally effective from June 2009 to May 2010, is budgeted at 5 billion yuan to subsidize each buyer 3,000 yuan to replace an 8-year-plus car with a new, small one, or 6,000 yuan to replace a 12-year-plus, mid-sized car.

Boosting the appeal of the program, the Beijing government raised the per-replacement subsidy earlier this year considerably to 18,000 yuan, as well as extending it to the year-end, whereby reportedly successfully attracting 200% more applicants each month in the summer.

In June, the Beijing government announced another 3,000 yuan subsidy for each buyer of energy-saving cars, to be effective within this year as another measure supportive of the government’s “green” policy.

EU’s Anti-dumping Duty
The European Union (EU) announced in May an anti-dumping duty of up to 20.6 % on aluminum wheel covers shipped from China.

Such punitive duty follows an investigation that found China-made aluminum wheel covers have seriously encroached on local manufacturers’ market to undermine their interest. Statistics show China-made aluminum wheel covers in the EU market have risen from a 6.3% share in 2006 to 12.4 % in 2009. The anti-dumping duty will last for at least six months and may be extended if necessary.

The EU has also imposed anti-dumping duties on China-made bicycles, shoes, paper, and facial tissues, with that imposed on bicycles likely to be extended this year for another five years. The rate of EU’s anti-dumping duty on China-made bicycles, imposed since 1993, has grown to 48.5% and will rise higher for some time.

China-made bicycles are among the few items which have been “punished” with an anti-dumping duty for 17 years, with such duty to be possibly extended until 2016.

The EU is the world’s largest bicycle market where 30 million bicycles were sold in 2009, 700,000 of which came from China.

One Million EVs in Germany
During a meeting between Chancellor Angela Merkel and senior executives of automakers in May, Germany proposed a national EV plan to launch at least one million electric vehicles by 2020, backed by the auto giants Volkswagen and BMW.

Germany targets to put on its roads one EV out of 45 cars within one decade; meanwhile German automakers will focus on developing more eco-friendly cars to reduce reliance on fossil fuel.

Two of the critical supporting projects for the EV plan are the building of battery development and infrastructure to be finalized this year; meanwhile Economic Minister Rainer Bruederle said that an ad hoc group will be formed to work out standard EV specifications and safety rules for Germany as well as the EU.

Mexico’s CO2 Standards
The Mexican government plans to announce standards for improving fuel economy to lower CO2 emissions for new cars this year, to be jointly drafted by the Ministry of Environment (SEMARNAT) and the National Energy Efficiency Commission (CONUEE).

Earlier this year, the Ministry’s National Ecology Institute (INE) convened an international workshop, co-sponsored by the Global Fuel Efficiency Initiative (GFEI) and the International Council on Clean Transportation (ICCT), to examine specifying such standards. The event gained broad support for reducing automotive CO2 emissions, with the automakers also showing commitment.

There are two possible approaches: set a minimum fuel efficiency for all vehicles or set an average target for new cars. The US, Canada, and Europe use the latter approach, while China is moving from minimum standards to an average standard for fleet that is more realistic.

In principle, both standards can be used simultaneously; though “for simplicity, a single regulation is preferred and an average fleet standard is probably appropriate,” said a Mexican official.

Filipino Bio-fuel
Inspired by the Brazilian success to develop sugar-cane bio-fuel, the Philippines is also adopting the green program to make bio-fuel with agricultural products.

“The Philippines also has abundant sugar cane, which is proven a good raw material for bio-fuel,” said a Filipino official. The Philippines can’t evade the global trend towards developing environment-friendly energy in which global investments have exceeded US$120 billion as of 2008. Of the green energy generated by solar power, wind and others, the Philippines is the most competitive in bio-fuel thanks to its strong agricultural industry.

Taiwan’s 2010 e-bike Year
After years of R&D, Taiwan’s electric bike manufacturers finally debuted e-bikes in June this year with the TES safety certificate issued by the Industrial Development Bureau (IDB), also marking 2010 as Taiwan’s e-bike makers’ formal entry in the market.

Not exactly cheap, e-bikes retail for prices similar to those of traditional motorcycles, between US$1,650-US$1,775; but each e-bike buyer can apply for a subsidy between US$250-US$656 from the government.

China Motor, a subsidiary of the Yulon Motor Group, ventured into this market for the great potential, launching its first e-bike, “e-Moving,” in June that is supported by over 300 retail and service outlets island-wide.

Kwang Yang Motor, after launching its SUNBOY later in June, aims to set up an even larger island-wide service network of over 3,600 outlets.

To promote e-bikes, Taiwan’s Tourism Bureau budgeted around US$25 million to subsidize e-bike buyer in Green Island and Liuqui Island off Pingtung County in southern Taiwan, where the Bureau plans to create an eco-friendly resort, where 14,600 motorcycles will be replaced with e-bikes by 2002 to help reduce CO2 emmission by 2,000 tons.

America’s EV Plan
Both the Democratic and Republican parties in the U.S. are promoting EVs by drafting an EV plan to subsidize enterprises engaged in EV battery development and infrastructural construction, as well as offer tax deductions to EV buyers.

“Countries around the world have been promoting the EV as national policies. What we have to do is to maintain our leadership in this field,” said Energy Department Deputy Secretary David Sandalow.

EVs will be available in American dealerships this autumn, with the volume to rise to 700,000 vehicles within a couple of years. The U.S. federal government is offering about US$7,500 in fed sales tax exemption for each EV sold, a tax deduction of US$2,500, as well as having allocated US$25 billion in low-interest loans to research institutes to develop alternative fuels.

(by Michelle Hsu)