China’s electric car tactics rattle automakers

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Beijing has long pushed for technology transfer in fields from high-speed rail to clean energy as a condition of contracts or licenses. China’s bullet trains are based on European and Japanese technology but are being marketed in Latin America and the Middle East, prompting complaints it is violating the spirit of such agreements.

China’s auto manufacturing policies have provoked disputes with Washington and other trading partners. The United States, Europe and Canada launched a World Trade Organization case in 2006 challenging Beijing’s effort to compel automakers to use Chinese-made components by imposing higher taxes on cars made with more than 40 percent foreign parts. The WTO ruled against Beijing in 2008, but by then automakers had developed local suppliers.

Automakers see China as an important center to develop electric technology as well as a huge potential market.

Beijing is trying to generate demand by promising subsidies of 60,000 yuan ($9,200) per electric vehicle. Cities are being given grants to buy electric buses and taxis.

Ford Motor Co. announced this week it will provide three hybrid and all-electric vehicles to government agencies and later to consumers to study how Chinese drivers use them.

Ford is recruiting Chinese engineers to work on alternative cars, said Nancy Gioia, a Ford executive with the futuristic job title Director of Global Electrification.

Gioia said Ford talked to Chinese officials about the industry plan, but Joe Hinrichs, CEO of Ford China, said it would withhold comment until the plan is released.

“The good news is, we have a good dialogue going on,” Gioia said.

The Ministry of Industry and Information Technology, which is developing the plan, did not respond to questions about its status and contents.

A draft of the plan circulated last August alarmed foreign automakers by proposing they could only be minority partners in electric car ventures, less than the 50-50 partnership allowed for conventional autos. That might give Chinese partners control over technology that could be used to create competing products.

Alternative vehicles at the auto show this week reflect the complex relations between Chinese automakers and foreign companies that provide advanced technology and are both partners and potential rivals.

Dongfeng Motor Co.’s plug-in Shuaike is produced in a joint venture with Nissan Motor Co. Dongfeng says the vehicles have been sold to government agencies and future public sales might be possible.

But Nissan plans to import its all-electric Leaf rather than produce them in China, possibly to avoid having to share more advanced technology.

Germany’s Daimler AG, maker of Mercedes Benz cars, is creating a new electric car brand with Chinese automaker BYD Corp. and plans to launch a model in 2013. Daimler’s CEO for Northeast Asia, Ulrich Walker, said it went that route because it wants to create a separate, lower-cost brand, not because of government pressure.

At the same time, BYD is developing its own vehicles.

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