Taiwan Gears Up for Electric Car Production

On Jan. 13, the Executive Yuan (the Cabinet) passed a program for subsidizing the development of electric cars. This is expected to give a strong boost to Yulon Motor and other Taiwan companies that are scrambling to move ahead of the rest of the world in the rapidly emerging electric vehicle industry.

The program calls for subsidies totaling up to NT$3 billion (US$93.8 million at NT$32:US$1) to spur the industry's development. The program, dubbed "development strategy and action plan for smart electric cars," will be carried out in two stages under the supervision of Minister without Portfolio Yiin Chii-ming.

During the first three-year stage, which begins this year, the central government will subsidize the purchase and use of 3,000 pilot electric cars by 10 municipalities. Implementation programs are to be proposed jointly by municipal governments and automakers, and will be subject to approval by the central government.

In the second three-year stage, starting in 2013, the government will subsidize the purchase of electric cars directly by consumers. The amount of these subsidies will be determined in accordance with the state of the government's finances.

One major beneficiary of the program will be Yulon Motor, which has already reached an agreement with the Taipei County Government for the use of its electric cars to carry tourists visiting Pinglin, an area famous for its tea culture. Another potential beneficiary is Pihsiang Machinery, a dedicated electric-vehicle maker, which has just landed an order for 1,000 mini-electric cars from Micro Car of France.

The program aims to help the domestic electric-vehicle industry outpace rivals in the global electric-car market by cashing in on Taiwan's competitive edge, especially its solid foundation in information and communications technology (ICT) and in the development and production of batteries and motors.

Electric Vehicle Advantages

The Ministry of Economic Affairs (MOEA), mastermind of the program, points out that Taiwan enjoys a competitive advantage in the development of smart electric cars, adding that the government's goal is to achieve an annual output of 60,000 electric cars, 20% of them for export. The MOEA believes that cooperation with mainland China will help Taiwan make major inroads in the global electric-car market, which in a few years could be worth more than NT$1 trillion (US$31.3 billion) annually.

Yulon Motor is spearheading the foray into that market with its self-developed Luxgen electric car, which has passed safety certification by Taiwan's Vehicle Safety Certification Center.

Yulon rolled out the seven-seat electric version of its Luxgen car, dubbed the Luxgen EV+, last September. Such a large electric car is rare in the global market, and it is targeted mainly at well-to-do buyers. Its battery is good for 300 kilometers on each charge, and can be recharged by plugging into household power of either 110 or 220 volts. Yulon has also developed a smaller electric car, dubbed the M'car, which has five seats.

The Luxgen electric car, like its gasoline-powered version, is claimed to be a "smart car," with such ICT equipment as a built-in 3.5G communications module, 10.2-inch audio-visual entertainment device, satellite navigation device, 360-degree surround-view system, and night vision device. The car boasts 24 CPUs, compared with seven or eight CPUs in a Benz or BMW. The car comes with several driver assistance systems, including a 360-degree surround-view display, back-up system, and central-lane deviation warning system.

The Luxgen incorporates a number of key auto-electronics technologies developed by the Hua-chuang Automobile Information Technical Center Co. Hua-chuang was established by Yulon along with several major Taiwanese IT firms, including HTC, Ever-Light, and E-ton, mainly for the development of technologies related to smart and environment-friendly cars.

Essential Support

The help of companies in related industries will be essential if Taiwan's electric-vehicle industry is to be competitive.

One such company is E-One Moli Energy Corp., a manufacturer of the lithium-ion batteries which are used in BMW's MiniE electric car. Founded in 1998, the company has acquired a Canadian R&D team whose members have over 20 years of experience in battery development. Lin Chia-chun, president of the company, believes that outstanding quality is the key to the success of its batteries, which have a record of "zero accidents and zero recalls."

Another related firm is the Fukuta Elec. & Mach. Co. supplies motors for the Tesla Roadster (the world's first electric sports car), BMW's MiniE electric car, and Yulon's Luxgen electric car. Thanks to its cutting-edge technology, including that used in copper rotors and high-precision silicon-steel plates, the company's electric-car motor has a horsepower 11 times that of a common model of the same size.

Taiwan also excels in the electric-control technology which is so crucial for electric cars. Chroma ATE Inc. is a control device and testing equipment supplier for the Tesla Roadser and Yulon's Luxgen. In addition, Taiwanese investors own 80% of AC Propulsion of the U.S., which develops electric-car systems for the MiniE, Telsa, and Luxgen.

Like its competitors in other parts of the world, however, Taiwan is also facing formidable challenges in developing the electric-car industry. The foremost difficulty is the development of low cost reliable batteries. Batteries currently account for over half of the total cost of an electric car; this is a major reason why electric cars cost so much that their popularity is hampered.

Electric-car batteries also have to meet the demand for huge amounts of power and dissipate the large amounts of heat generated during driving. Inadequate heat dissipation could lead to the danger of fire or even explosion.

Another challenge to the popularity of electric vehicles is the need to establish a convenient system for the recharging of batteries on the road.

Chen Kuo-jung, president of Yulon Motor, remarks that unlike the domination of the global gasoline car market by major auto-making countries such as the U.S., Japan, and Germany, developers of electric cars are now all in the same position at the starting post-and this gives Taiwan a rare opportunity to develop the huge market potential of electric cars. He cautions that for all its advantages, though, Taiwan has only about a year in which to establish a beachhead for itself in this new industry-and this is an opportunity which will never come again.