Taiwanese Makers Gear Up for Electric-Car Market

Following the passage of the "development strategy and action plan for electric smart cars" by the Executive Yuan (the Cabinet) on April 15, Yulon Motor and other domestic auto manufacturers are gearing up to enter the rapidly emerging electric-car market a step ahead of their global rivals.

The electric-car development program targets an annual output of 60,000 electric smart cars by 2016 and 1.2 million by 2030, including 1 million for export, which will make Taiwan the fifth largest exporter of electric smart cars in the world.

The government will appropriate an NT$9.7 billion (US$303 million at NT$32:US$1) seven-year budget for the program. Among other things, the funds will be used to subsidize the purchase of electric cars by local citizens.

The new program follows the "plan for the development of the electrical motorcycle industry," approved by the Executive Yuan last August, which envisions an output of 160,000 electrical motorcycles in 2012. To help achieve that goal, the program offers subsidies by the central government for the purchase of electric scooters, ranging from NT$8,000 to NT$11,000 each, added to municipal government subsidies ranging from NT$1,500 to NT$10,000, as well as a 50% commodity tax reduction.

The new program will be carried out in three stages. The first stage calls for a period of preparation and demonstration, lasting from 2010 to 2013, during which the government will implement 10 demonstration programs involving 3,000 electric smart cars. The central government will exempt electric cars from the commodity tax for three years and encourage municipal governments to do the same for the license tax. As part of the demonstration program, the government will offer a 30% subsidy to municipal governments and enterprises for the purchase of electric smart cars.

The second stage, spanning 2013-2016, is a growth stage which aims at the production of 60,000 cars, including 15,000 for overseas markets, with a total output value of NT$120 billion (US$3.8 billion). Another goal of the stage is the development of a local electric smart-car maker that ranks among the top 10 in the world.

In 2017 the local electric smart-car industry will enter the stage of expansion with the goal of turning out 1.2 million units a year, including 1 million for export.

Yulon Motor seems to be the local front-runner in the race to the electric-car market. The company has reached an agreement with the Taipei County Government for an electric-car demonstration program in Pinglin village, under which the company will initially provide 30 Luxgen electric to transport visitors to the renowned tea-plantation area. The program is scheduled to get under way in the fourth quarter of this year.

Yulon has introduced two self-developed seven-seat electric car models bearing the Luxgen brand; the company claims that these are smart cars, thanks to their incorporation of such ICT (information/communications technology) equipment as a built-in 3.5G communications module, audio-visual entertainment device, satellite navigation device, 360-degree surround-view system, nigh vision device, back-up system, and central-lane deviation warning system.

In cooperation with Geely Automobile of China, Yulon has also developed a small electric car, dubbed M'car, which uses the body of Geely's Panda model. The M'car is aimed at the Chinese market, which appears to be one of the most important overseas targets for Taiwanese electric-car makers.

Industry insiders point out that Taiwan enjoys strong industrial support for the development of electric cars, including a solid ICT industry, advanced battery manufacturing technology (critical for electric cars), electric-control technology, and strong motor-production capability.

The insiders point out that unlike the internal-combustion auto industry, which is dominated by major auto-making countries such as the U.S., Japan, and Germany, the electric-car industry is at the starting gate all over the world. This offers Taiwan a rare opportunity to take the lead in developing the huge global market.