China to increase investment in Hybrid vehicles

China aims to become one of the leading producers of hybrid and electric vehicles within the next three years. The goal, which radiates from the very top of the Chinese government, suggests that Detroit’s Big Three, will face even stiffer foreign competition on the next field of automotive technology than they do today.

China is behind the United States, Japan and other countries in making gasoline-powered vehicles, but by skipping the current technology, China hopes to get a jump on the next. Japan is the market leader in hybrids today, which run on both electricity and gasoline, with cars like the Toyota Prius and Honda Insight. The United States has been a laggard in alternative energy vehicles. GM’s Chevrolet Volt is scheduled to go on sale next year, and will use rechargeable batteries imported from South Korea.

China’s intention, in addition to creating a leading industry that will produce jobs and exports, is to reduce urban pollution and decrease its dependence on imported oil. But electric vehicles may do little to clear China’s smog-darkened skies or curb its rapidly rising emissions of global warming gases. China gets three-fourths of its electricity from coal, which produces more soot and more greenhouse gases than other fuels.

A report by McKinsey & Co last autumn estimated that replacing a gas powered car with a similarly sized electric car in China would reduce greenhouse emissions by only 19%. It would reduce urban pollution, however, by shifting the source of smog from car exhaust pipes to power plants often located outside cities.