Signs deal for C30 demo operations in Shanghai

SHANGHAI - Volvo Car Corp last week announced it will start field trials on its C30 electric car in the eastern metropolis, becoming the latest in a line of global automakers to test electric vehicles in China.

The Swedish carmaker, now owned by Zhejiang Geely Holding Group Co, signed a memorandum of understanding on Nov 8 with Shanghai International Autocity Development Co Ltd to lease its electric C30 for demonstration operations in Jiading district on the western outskirts of Shanghai.

Shanghai is the third locale outside Sweden after Paris and Los Angeles where the automaker is testing its electric C30. Volvo said it will collect data needed for future mass production of the model.

The carmaker now has plans for only limited production of the model. Most of the initial 250 C30 electric cars will be leased to fleet customers such as government authorities and companies in Sweden, Norway, Belgium, the Netherlands, France, Germany, the US and China, according to the company.

The electric C30 is powered by a 24 kWh lithium battery pack that offers a range of up to 150 kilometers on a single charge. It accelerates from zero to 100 km in 10.5 seconds and is able to reach maximum speed of 130 km/h.

Designed and engineered to meet the automaker's noted safety standards, the Volvo C30 electric has passed the company's crash test, it said.

On the same day as Volvo's signing ceremony, Japan's Honda Motor Co also launched an electric car test in the southern city of Guangzhou in preparation for a planned production of electric vehicles at its joint venture Guangqi Honda in the last half of 2012.

Toyota Motor Corp has had a road test of its plug-in hybrid Prius underway since the end of last year in conjunction with a local institute in Tianjin. The company also has plans to test pure electric vehicles.

European carmakers BMW and Volkswagen also have had electric models on China's roads. BMW brought 25 MINI E cars to China earlier this year for daily use by selected drivers in Beijing and Shenzhen. It will bring over its Active E next year for field trials next year.

Volkswagen has also had a demonstration fleet of electric and hybrid cars in China this year, first in Beijing from April to August, and then in seven other cities across the country from September. The automaker said it expects to produce electric vehicles in China in 2013 at the soonest.

The Chinese government is strongly encouraging development of electric vehicles and has offered subsidies for automakers and buyers to accelerate the process. But it is generally believed that mass production and wide use of electric vehicles around the world is still a long time distant.

Volvo's chief executive Stefan Jacoby said electric vehicles will account for less than 5 percent of global auto sales in 2020, but he noted the company still has to invest ahead to ensure a leading position in future competition.

Freeman Shen, senior vice-president of Volvo Cars and chairman of Volvo's China operations, said the company does not exclude the possibility of locally produced electric cars in China.

After it was sold to Geely last year, Volvo announced plans to build two plants in China, one in Chengdu in the southwest and another in northeastern city Daqing, but is still awaiting government approval. The Chengdu plant is now scheduled to start production in 2013.

Volvo's sales in China in the first 10 months surged more than 50 percent over the same period last year. Global sales increased over 22 percent.

Jacoby said the company will sell at least 400,000 vehicles worldwide this year and continue to be profitable.

But net profits from the first 10 months are expected to decline from a year ago due to heavy investment in China for technologies and expansion, he said.