GM, VW, Toyota to build electric vehicles in China

The world’s top carmakers are gearing up to build electric cars in China, despite concerns about market demand and the potential their technology could be compromised in a market with weak safeguards for intellectual property.

Companies, including Volkswagen, General Motors and Toyota, set out plans for electric-car production in China at the Auto Shanghai vehicle expo, bowing to pressure from Beijing.

China is the world’s largest market for electric vehicles, or EVs, and carmakers who don’t set up production there could find themselves shut out of it.

Even so, some admit privately to being anxious about opaque regulations governing battery production and technology transfer, and misgivings about near-term demand for battery-powered cars.

GM, for example, confirmed it would build a Buick version of the plug-in hybrid Chevrolet Volt in China with its local partner, SAIC Motor. But Mark Reuss, GM’s product-development chief, sounded less than bullish when asked if there was genuine demand for EVs in China. “I think there could be,” Mr Reuss said.

Ultimately, the indispensability of China’s car market meant it was “manifest destiny” that foreign carmakers would agree to set up electric car plants in China sooner or later, said Bill Russo, Shanghai-based managing director at consultancy Gao Feng Advisory.

Tesla, which didn’t attend Auto Shanghai, is now almost alone in having not yet lined up to confirm plans to manufacture electric cars in China.

Even Toyota, which previously rejected the EV technology in favour of hybrids and fuel-cell vehicles, said it would ramp up EV development.

An estimated 350,000 EVs were sold in China last year, roughly half the global total. Most analysts expect the EVs market to grow quickly in China.