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Calstart sees green tech ops in China medium and heavy duty trucks

May 31, 2013

China’s passenger vehicle market is in the crosshairs of many U.S. companies with “green” automotive technology.  The bus market is also getting a lot of attention.  There hasn’t been much focus on efforts to make the medium and heavy-duty truck sector more environmentally friendly, however.

That is a missed opportunity, said Bill Van Amberg, senior vice president of Calstart, a California-based non-profit consulting group focused on expanding clean energy transportation. Van Amberg and others from Calstart have been traveling to China, meeting with companies and officials, to prepare for the second annual US-China Clean Truck and Bus Summit 2013, taking place in Shanghai in October.

The Summit, which last year was held in Beijing, is part of a program launched about a year and a half ago with the U.S. Department of Commerce.    For the Department of Commerce, the primary goal is to help U.S. companies sell their technology in China, said Van Amberg.  For Calstart, the broader goal is growing the use of greener technology globally.  China is a hot market for that.  “For fast-paced environmental improvements, China is a huge emerging space,” he said.

And it is emerging even more quickly since China’s netizens have become super-critical of China’s air pollution problem.  China’s central government tried to pretend the air wasn’t that bad.   Posts by the air quality monitor at the U.S. Embassy in Beijing ended that façade.   Now, Chinese consumers vociferously express their discontent with the air quality via Weibo and other social media channels.

So Beijing has started paying more attention to the problem.  There is a fleet of electric buses in the capitol city, at least.

Meanwhile, medium and heavy-duty trucks, while shrinking as a percentage of total vehicle sales, are still a major presence on China’s roads.  Many of those trucks are older, highly-polluting models. It doesn’t help that the diesel used in China has a higher sulfur content that that used in Europe and the U.S.

Though the central government has long talked about requiring cleaner diesel, it hasn’t acted.   That would mean higher fuel prices for users of the fuel, which includes a lot of farmers.  They wouldn’t be happy and the central government wants social stability above all else.  If the price didn’t rise, however,  the companies refining the diesel would have to absorb the cost increase, which would make them unhappy. A no-win situation for the central government.

Something is changing, however.  In February, the central government announced that it would soon publish new diesel quality standards that will slash sulfur omissions to one-seventh the current level, and that it would allow refiners to pass the cost on to consumers. The new standards would be enforced by the end of 2014, said the central government.

Of course, the central government has also talked a lot about growing the use of new energy vehicles, which includes battery electric and plug-in hybrid electric vehicles, among other technologies. Sales are still slow, however.  Hybrids seem to be the technology du jour.   Just how committed China is to EVs depends on who in the government you are talking to, said Van Amberg.  But, “I still think from an economic development and future technology standpoint, (China) remains highly interested in new energy vehicles,” he said.

From a pragmatic standpoint, said Van Amberg, there is a lot of interest in technology that makes diesel, natural gas, and gasoline-powered commercial vehicles more efficient and cleaner.   A lot of that opportunity is at the supplier level, he said.

As for what “green” technology Chinese commercial vehicle makers are looking for they are interested in control systems for electric vehicles, said Van Amberg, ranging from hybrid drive train control to battery management systems to power electronics to control the small motors used in EVs.  And of course — as companies such as Ener1 discovered when they were approached by Wanxiang about a partnership — Chinese companies are very interested in cell packaging technology.

In the non-EV area, said Van Amberg, “there is some real interest in China in more advanced diesel technology, in advanced treatment for fuels, in natural gas engine controls, and in fuel system controls.

As anyone who has spent time in China knows, there are plenty of CNG-powered buses (and taxis) running around.  Those buses may be less polluting than a gas-powered version, but that doesn’t mean they are very efficient.  That is an opening for U.S. companies, said Van Amberg. Even though CNG vehicles purchases aren’t incentivized the way EV purchases are, the lower price of natural gas as a fuel is creating demand for them, he said.  “The first natural gas systems in the U.S. were not that efficient,” said Van Amberg.  “There were a variety of things we had to work through, that is what China is working through.”

In the EV bus area, however, he thinks China is farther along than the U.S.  In the U.S. electric buses are being tested in very small numbers at various cities, said Van Amberg.  Even though California has a regulation in place to push zero-emission buses, few are in operation, for example.

In China, a side trip after last year’s summit visited a battery swapping site for Beijing’s fleet of 100 electric buses.

Beijing has a fleet of electric buses that use the battery swapping method.

Beijing has a fleet of electric buses that use the battery swapping method.

The southwest China municipality of Chongqing has a fleet of fast-charging electric buses.  “In China, not only are they fielding the buses, they have been in use for years,” said Van Amberg.    “This is a technology that some people in the U.S. would have been very dubious of.  In China they just did it.”  I pointed out that in China the governments didn’t have to answer to voters or a budget, which makes trying out new technology easier….

Plenty of big-name U.S. companies were at last year’s summit, which had about 120 participants.  They included Navistar , Eaton Corp,  BAE , and service sector companies A.T. Kearney and Well Fargo Bank.  But Chinese companies and government ministries and agencies were also a big presence, from Beijing Municipal Science Commission  and the Hangzhou Public Transit Group  to the Ministry of Industry and Information Technology.  Chinese automakers were there, including heavy-duty truck makers such as FAW and Foton.

Weichai, which produces trucks, engines, and transmissions among other products, was a sponsor, said Van Amberg.  No surprise there; on its website Weichai Group bills itself as “green power, drive your dreams.”  Not to be confused with Build Your Dreams automaker BYD , which also sent its marketing manager Sherry Li.    Plenty of smaller companies were there as well, however.  Micro-EV component maker Shanghai Edrive was there last year and will return.  Nidec Motor of St. Louis, MO participated last year.

Calstart is aiming for 180 to 200 participants this year, said Van Amberg. It doesn’t want to get much bigger because it aims to be a venue in which U.S. companies can get to know potential Chinese partners as well as a venue for information, he said.  “The companies we would love to have take part are U.S. suppliers and manufacturers of key components,” said Van Amberg.

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