Only the government can spur hybrid interest in China
I've been monitoring the hybrid and plug-in story in China for some time, and the most interesting thing about the Chinese hybrid story is that there is no story. Despite home grown lithium supplies and battery manufacturing capabilities, a stranglehold on the rare earth metal market, and Warren Buffett's BYD backing, hybrid and plug-in sales in China are, essentially, non-existent.
Even more interesting, as more manufacturers move to build hybrid cars in China, many are already experiencing declining hybrid sales.
Honda, for instance, is one of the latest major manufacturers to explore the idea of building hybrids in China. Yet, Honda Civic hybrid sales, for example, have declined from 300 vehicles last year, to just 63 so far this year. Nevertheless, the possibility of significant tax incentives might be too big of a carrot for Honda to ignore. Plus, by partnering with a Chinese company, Honda can avoid the 25 percent Chinese import tax.
Regardless, that brings up the next most interesting aspect of this Chinese hybrid story. The Chinese government's announced auto plans that expect full technology transfers to Chinese partners.
Makes one wonder, is China really the future of the auto market for major foreign automakers, or just fool's gold?