WHEN BMW began field testing its Mini electric car in Shenzhen last month, it was another step forward in China's campaign to transform the world's largest auto market into the greenest.

And last week, eight electric vehicles were handed to private users in Shanghai as the first batch of the zero-emission vehicle hit the roads in the city.

There is no doubt rising fuel prices and growing environment protection awareness are pushing car makers to speed up the development of new-energy vehicles.

But is the industry putting the horsepower before the cart? Without a set of nationwide industry standards for new-energy vehicles, some analysts are warning that a waste of resources and hodge-podge development may result.

"In the long term, the electric car will definitely replace the conventional carbon combustion vehicle," said Jiang Keyi, general manager of Shenzhen Power New Energy Technology Co Ltd, an affiliate of the state-owned China Southern Power Grid. "Though the future is great, the road to get there is tortuous."

Among the problems he cited is early fragmentation in the industry.

"Nearly every local government supports the development of a local company, and each local car maker has its own battery standard," Jiang said.

In Shenzhen, Jiang's company produces charging poles and stations tailor-made for BYD's E6 electric car and its F3DM plug-in hybrid. The technology cannot be applied to electric cars manufactured by rivals Chery or Toyota unless modifications are made.

There are also several solutions that are being considered by car makers who support battery replacement. Some car makers installed the battery in the storage area or under the rear seats while others equipped the battery on the vehicle chassis.

"If the standard problem is not appropriately handled, it will be a great waste of resources," Jiang said.

China's goals

China is no stranger to new industries getting ahead of themselves. Now is the time, industry analysts say, to develop the kinds of standards that will assure smooth development of new car technology.

China has reason to pursue its green goals. Its rapidly growing vehicle population is a source of considerable pollution in cities. And by getting into the industry on the ground floor, the nation hopes to leapfrog into the global ranks of top manufacturers of energy-efficient vehicles.

The nation has chosen the electric car and hybrid as its major focus for the green future. About 100 billion yuan (US$15.3 billion) is expected to be injected into the industry in the next 10 years to support industrial development, according to a nationwide blueprint for the new-energy vehicles that has been under discussion.

The draft, which is expected to be announced sometime in the first half of this year, also calls for China to have production capacity for 1 million new-energy vehicles by 2015 with the pure electric and hybrid vehicles accounting for 50 percent. The ultimate goal is for green car sales to top 5 million by 2020, making it the biggest market for clean-burning vehicles in the world.

The plan is so ambitious that it has caught the attention of major car makers anxious to get a piece of the action.

The 10 all-electric-powered Mini Es were handed to private users in Shenzhen for a five-month trial as Andreas Aumann, head of business development of China & Coordination JV, BMW AG, said the project is important before officially marketing new-energy vehicles in China.

China's BYD plans to start mass production of its E6 electric car this year while General Motors will start selling its Volt plug-in electric car in China at the end of this year.

BYD, backed by US billionaire Warren Buffett, has teamed up with Daimler AG to form a 600 million-yuan joint venture in China that is scheduled to roll out an all-electric vehicle in 2013. Shenzhen-based BYD will also partner Volkswagen for joint research in electric batteries.

Nearly all Chinese auto makers, including SAIC Motor Corp, FAW Group Corp and privately owned Geely Holdings Co, have announced plans to launch electric cars within the next two years.

It's not only about manufacture of the cars themselves that is stirring the pot. A whole associated industry chain is in the making, including the construction of charging stations and batteries.

A national alliance of 16 companies owned by the central government was formed last August to jointly develop electric vehicles, which include three car makers and companies in allied sectors such as oil, aerospace, information technology and electricity.

State Grid Corp, the nation's main electricity operator, plans to build 2,351 public charging stations and 220,000 charging poles by 2015.

Sino Petroleum Corp has tied up with Beijing Shouke Group Co to set up a new-energy technology company aimed at revamping existing gas stations with more charging facilities.

Zhang Zhiyong, an independent auto analyst, said the top priority now is to coordinate the interests of major participants in the new-energy vehicle industry,

"In China, Sinopec and China Petroleum have advantages in the construction of infrastructure, while State Grid can provide the electricity," he said. "If we could combine strengths, development will be more efficient."

Currently, battery technologies and charging infrastructure are two major challenges facing the industrialization of electric cars in China.

The restrictive 200-kilometer range on a fully charged battery would seem to relegate electric car models to a position as second family car, at least initially. A more extended range of mileage would require more battery packs, which in turn increase vehicle weight and pare storage space.

In addition, installing charging equipment at garages or public parking spots is no small feat. It usually takes up to a month, BMW's Aumann said.

But he did note that the problem might be less onerous in China because power companies are all state-owned and can be snapped into such projects more quickly.

Another concern is that companies rushing to build the infrastructure to support electric cars face a huge financial burden. Some may leap before they look.

Burden of cost

Jiang said a charging pole, for example, can cost 15,000 yuan (US$2,307), and a charging station may cost as much as several hundred thousand yuan.

"Under the current pricing scheme for electricity, there is no room for profit among electricity suppliers," he added. "For any company that invests huge sums of money without a reasonable business model to back it up, the burden of cost may be overwhelming."

Despite the need for some order, China's ambition in promoting new-energy vehicles is shifting into high gear, with government subsidies and a host of pilot projects to demonstrate the viability of the new technologies.

The nation began offering subsidies of up to 60,000 yuan on the purchase of all-electric cars in Shanghai, Changchun, Shenzhen and three other cities last June. At the same time, more than 25 cities launched trials of the new-energy vehicles, mainly in public transportation.

Local governments are also drafting regulations to offer extra subsidy for green-car buyers.

In the blueprint for 2020, more than 30 billion yuan will be spent to support such demonstrations, and 50 billion yuan is earmarked for development of core technologies and industrial applications.

"Mainstream consumers may not yet be ready for electric vehicles, so some governments are offering or proposing incentives. Others are providing or planning rebates, grants, and loans," said a PricewaterhouseCoopers report last November.

About 32 percent of automotive CEOs expect government assistance for the industry, which is vital, the report added.

Though car makers are actively rolling out new-energy models, they also admit that a lot of work needs to be done to market the cars to the public. In the meantime, many auto manufacturers are trying to fill the gap by improving fuel efficiency on existing models.

Ford Motor Co recently equipped its most advanced Eco-boost GTDi engine on its new generation of Mondeo sedan, and Audi equipped a fuel-efficient 3.0-liter TFSI engine on its new A8L model while also making efforts on reducing vehicle weight for saving fuel consumption.

SAIC

SAIC Motor Corp said it would speed up the industrialization of hybrid and electric over the next five years in an attempt to grab a 20 percent market share of China's new-energy vehicle market by then.

The nation's largest auto maker last year rolled out a medium-hybrid version of its Roewe 750 sedan, which could improve fuel efficiency by 20 percent. Next year, it plans to start making a plug-in hybrid Roewe 550 sedan. By 2013, a fleet of fuel cell vehicles is expected to start trial operation before being mass produced in 2015.

SAIC has invested 2 billion yuan to set up a new-energy vehicle firm for developing core technologies in 2009. The car maker also teamed up with the US's A123 to develop battery systems.

Chongqing Changan Automobile Co

The nation's fourth-largest auto maker plans to invest 1.2 billion yuan in the next two years on new-energy vehicles with focus on developing pure electric vehicles.

By the end of 2010, the company had developed and launched eight new-energy models, including Changan BenBen Love electric, BenBen Mini Electric, Zhixiang HEV (hybrid-electric vehicle), Jiexun HEV (a mild hybrid car) and the Zhixiang fuel-cell SUV.

The car maker aims to have 200,000 energy-efficient and new-energy vehicles by 2010 with output of core spare parts of 500,000 sets.

In January, Changan signed a strategic agreement with LG Chem Ltd, South Korea's biggest chemicals maker, to jointly develop lithium-ion batteries for new-energy vehicles

BYD Company Ltd

BYD, backed by billionaire Warren Buffett, have sold more than 1,000 units of the F3DM plug-in hybrid in China last year. The taxi fleet operation of its electric car E6 surpassed 2 million kilometers in China by the end of 2010 and the e-Bus K9 has been operated as an urban bus on several bus routes in three cities in China. The car maker said sales of its new-energy vehicles may top 10,000 units this year.

Last year, BYD lso teamed up with Daimler AG to form a 600 million-yuan joint venture in China that is scheduled to roll out an all-electric vehicle in 2013. Shenzhen-based BYD was also the partner of Volkswagen for joint research in electric batteries.

Zhejiang Geely Automobile

The privately owned car maker said two of its electric cars under the names EK-1 and EK-2 won production permits from the state government last year. The EK-2 will hit the Chinese market at the end of next year while another plug-in hybrid model will be launched too. Geely also plans to roll out its first pure electric car in China in 2013.

FAW Group

FAW has been developing three electric car models based on its self-owned Besturn B70, B50 and NBC platform.

As part of its blueprint for new-energy cars, the car makers said its product offerings will use technologies of hybrid, plug-in hybrid and pure electric cars. By the end of 2012, FAW Group plans to have a production capacity of 50,000 units for fuel-efficient new-energy vehicles. Its first new energy vehicle production base will kick off operation in July in Changchun.