GM sees car sharing in China as way to intro EVs but there are potholes in the road

Car sharing seems to work in the U.S. and Europe, and a growing number of consumers want to give it a try.  Why else would global car-rental giant Avis Budget Group Inc. have recently paid $500 million to acquired Zipcar Inc., a Cambridge, Mass.-based car sharing company that has trouble making a profit?  http://online.wsj.com/article/SB10001424127887324374004578217121433322386.html

But will the model work in China?  There are many barriers, both structural and, in my mind, cultural. 

The business, whereby a consumer becomes a member of a company and then can use one of that company’s vehicles short-term in any city where it has a presence, is growing.     Zipcar www.zipcar.com says the car-sharing market could reach US $10 billion North America, Europe, and Asia.  For automakers, it is also a good way to introduce consumers –and many of the users of Zipcar’s services are a targeted young demographic – to new technologies such as pure electric vehicles.   American Honda has Fit EVs (a pure EV) as well as the Insight hybrid in the Zipcar fleet.  http://ir.zipcar.com/releasedetail.cfm?ReleaseID=663235 General Motors has Volt extended range electric vehicles in the Zipcar stable. http://chicago.cbslocal.com/2012/03/22/zipcar-to-add-5-chevy-volts-to-its-fleet-3-electric-cars-for-i-go/

Now, General Motors is hoping car-sharing can turn Chinese consumers on to electric vehicles.  But its approach in China is a bit more circuitous since there is not a Chinese version of Zipcar.  In China, however, GM is battling not just consumer reluctance to use an EVs but also bureaucratic infighting that is preventing the build out of a charging infrastructure.  How much to charge for the electricity is also an issue.   If the car-sharing program gets off the ground, I would add to that list a Chinese consumer indifference to taking good care of something that is only borrowed, not owned. 

In October of 2011, General Motors announced it had signed a Memorandum of Understanding with the Sino-Singapore Tianjin Eco-City Investment and Development Co. to integrate its EN-V personal mobility pure electric vehicles into the Eco-City.  http://media.gm.com/media/cn/en/gm/news.detail.html/content/Pages/news/cn/en/2012/Jun/0627_Signs_MOU.html The Tianjin Eco-City, located 40 kilometers from the center of the northeast China city of Tianjin, aims to build a sustainable community of 350,000 residents in a 30-square-kilometer area.  

Though it has not been widely discussed, a car sharing program is part of GM’s plan to introduce pure EVs to the inhabitants of the Eco-City.  It’s part of a wider scheme to convince Chinese to buy GM’s just-launched Sail SPRINGO EV, http://media.gm.com/media/cn/en/gm/news.detail.html/content/Pages/news/cn/en/2012/Jun/0627_Signs_MOU.html  but the SPRINGO (GM always caps that in its press releases so I am doing the same.  Perhaps it wants us to shout the name when we read it….) isn’t the car GM is using in the Eco-City experiment.  Rather, it will use a fleet of EN-Vs, the pod-like pure electric vehicle first introduced at the Shanghai World Expo in 2011.  GM showed an artist’s rendition of the EN-V 2.0, a more advanced version, at the Beijing auto show in 2012. 

The automaker aims to have a small demo fleet of EN-Vs in operation in the Eco-City within a few years, according to people familiar with the project.  If it can overcome some bureaucratic barriers, that is. GM envisions charging station installation in apartment parking areas and commercial buildings for workplace charging.  But currently there is no method to get permission to install charging stations. That might sound like a small thing.  But it isn’t in China. 

China’s various government ministries have also not agreed on what charging plug standard to use, though China has announced its own China GB standard.   The China GB standard is similar to the European IEC standard with some important differences that make it less safe.  The State Grid, www.sgcc.com.cn one of China’s two state-owned electric utilities, and SinoPec, http://english.sinopec.com/ a state-owned oil company that also owns gas stations, are arguing over how to resolve that issue. 

Another unresolved issue is who will be allowed to sell the electricity used for charging, and at what price. The electricity price to residential customers is much cheaper than to industrial customers, but the State Grid wants to charge more than the industrial price to its customer for EV charging.

There are already nascent car-sharing programs in China using electric vehicles.  The government of the east China city of Hangzhou  offers car sharing through its EVnet company.  Car leasing company Shanghai Dazhong has said it will offer car sharing, though it hasn’t said it will include electric vehicles.  And Shanghai’s Jiading District, home to Shanghai International Auto City, is also putting together a car-sharing program using local automaker SAIC’s pure electric Roewe E50 , sources tell me.  A source at an international car rental company says his company is also talking to Tianjin and Jiading about car-sharing. 

What I wonder is how Chinese consumers will treat these borrowed cars.  Okay, I don’t wonder. I fear.  Perhaps the assumedly younger consumers who will want to become members in an electric car-sharing program will return the cars in pristine shape, both inside and out.  But I doubt it.  I envision smoke-filled vehicles with much trash in them and cigarette ash strewn throughout.  I hope I’m wrong.