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Electric car sales booming in China, but not because buyers want them

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Tyrone Siu/Reuters/File

(Read caption) A KIA Ray EV electric car is charged during an auto exhibition in Guangzhou, China.

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In recent years, the Chinese government and some cities have instituted generous incentives on electric cars, hoping that putting more of them on its roads will curb air pollution.

Until late last year, car buyers didn't seem to show much interest.

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Since then, Chinese electric-car sales have climbed steadily.

But drivers aren't buying the cars because they actually want them, according to Automotive News China (subscription required).

While the numbers appear good, the report argues, there still appears to be a significant lack of enthusiasm for electric cars among Chinese buyers.

Sales are up in Beijing, but that city has also severely restricted the number of available registration slots for non-electric cars.

The city government offers just 20,000 new license plates available each month, through a lottery, but no lottery is required for electric-car registrations.

And since the national government's incentive programs are also open to plug-in hybrids, the actual environmental benefit of some of these sales may be questionable.

In Shanghai, the bestselling car with a plug is the BYD Qin, a compact four-door plug-in hybrid sedan.

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But China's lack of developed charging infrastructure means it's likely that many of those cars will spend most of their time running entirely on internal-combustion power.

Nonetheless, plug-in hybrid buyers in Shanghai still get free registration, avoiding fees of up to $12,000 at that city's monthly auctions.

In addition, Chinese electric-car sales figures may also include some proportion of what could be considered neighborhood electric vehicles by U.S. standards. 

Those vehicles generally have a low top speed, little equipment, and aren't designed to be driven on highways or other crowded thoroughfares.

Government enthusiasm for plug-in cars will likely continue to boost sales, as carmakers look for subsidy money.

In fact, industry trade groups are suspicious that some carmakers in China may be inflating the sales numbers of plug-in models.

Last month, an official with the China Passenger Car Association reportedly said that certain unnamed carmakers were exaggerating plug-in sales figures--by up to 20 percent, in some cases.

Carmakers are being pushed by the government to put ever-increasing numbers of plug-in electric cars on Chinese roads.

Domestic automakers are now reportedly expected to sell 1 million electric cars and plug-in hybrids per year by 2020, and 3 million by 2025.