Taking a cue from the growing penchant for alternative energy vehicles in China, General Motors (GM) is ramping up its electric vehicle (EV) program there. The Chinese arm of the company has doubled the target for new models to be rolled out over a period of five years. The current target is 20 new models – comprising 10 fully electrified models to be launched through 2023 and 10 models the company had announced earlier for a four-year program starting 2016.
GM is apparently encouraged by the new transportation policy being implemented by Chinese regulators, promoting production of vehicles that run on non-fossil fuels.
Though one of the key elements of the revised policy is the removal of restrictions on overseas firms for the production of vehicles powered by battery and hydrogen fuel cell, GM does not have immediate plans to enter the Chinese market on its own. The company said it will continue the existing joint venture partnerships with local players, under which it is already making a few electric car models, and expand the EV portfolio with advanced models suitable for the Chinese market.
The Chinese arm of the company has doubled the target for new models to be rolled out over a period of five years
As per the new regulation, which is expected to come into effect next year, automakers have to follow a strict quota system and maintain a ratio while manufacturing vehicles that operate on conventional fuels and those powered by non-gasoline energy.
The Detroit-based General Motors is in an advantageous position for being the first among the foreign firms to hit the EV market in China, which is witnessing a huge rush of domestic automakers vying to clinch deals involving electrified passenger vehicles and plug-in hybrid cars.
Of late, GM has made great inroads into the autonomous and electric car markets, thereby shedding some of its post-recession blues. The company has launched an aggressive restructuring program, including retooling of its manufacturing facilities to ramp up the production of driverless cars and alternative-fuel vehicles. Hurt by the huge costs and a modest decline in sales, GM’s first quarter earnings plunged nearly 60%.
Shares of the company gained nearly 13% last week when investor sentiment hit a high after Japan-based SoftBank offered a $2.3-billion funding for the autonomous car program. The uptrend continued when markets opened this week, but the stock pared some of the gains in the early session Tuesday and traded lower.