Despite slow market penetration of hybrids and electrics, automakers are still betting on the future of new energy cars.

Zhang Xin, deputy manager at BAIC Motor Group, said last week at the Global Energy Saving and New Energy Vehicles Summit in Beijing that the company will "unswervingly" develop pure electric vehicles in the future, and it will try to present its "best piece of work" by 2015.

Zhang also paid tribute to US electric-car maker Tesla several times, saying that Tesla's Model S is the "perfect combination of the automobile industry and information technology."

Recent media reports said that Tesla - founded by Silicon Valley genius Elon Musk - is readying to open an outlet in Beijing, after its Model S outperformed its rival model from premium carmakers such as Audi and BMW in the US. The success of Tesla's Model S has clearly inspired Zhang's company.

"Model S is an icon for all electric car producers in the world," said Zhang, noting that pure electric cars will be the focus for the company's new energy strategy.

But for most industry insiders and naysayers to pure electric cars, whether the company can produce a model that is well accepted to the market remains uncertain.

Inspiration from Tesla's Model S 

Zhang said that there has been clear instruction from Beijing municipal government for BAIC to develop pure electric cars as the city looks to greener cars to ease mounting public concerns over air pollution.

BAIC recently launched its new electric car model E150, priced around 250,000 yuan ($32,620). But with subsidies from the government and the company itself, consumers can more than halve the price and claim it for 110,000 yuan.

The E150 model has a range of around 150 kilometers. A fully charged car will require about six hours of battery-charging, for which the company promises to make convenient by installing charging facilities around the city for car owners to use free of charge.

Another perk for buying the car is that consumers who qualify for Beijing's car plate lottery can skip the lottery pains - to still receive a plate - and directly purchase the model.

BAIC also introduced several models suitable for use in municipal projects, such as sanitation trucks and electric-powered buses, as the government is attempting to trend toward the use of new energy cars due to environmental concerns.

Inspired by the operating system of Tesla's Model-S, which features a 17-inch touch screen with voice-activated commands, Zhang said that BAIC is also presently in talks with Lenovo to develop a similar system.

Besides the dazzling operating system, the Model S electric car has a range of up to 480 kilometers - even its base model boasts a range of 300 kilometers. Priced between $52,400 and $87,400 in the US, the Model S cars brought in a reported sales of 4,750 units in the US in the first quarter, which has helped the company turn a profit from electrics for the first time.

"Domestic companies are still not capable of producing models to compete with the Model S - battery has been the major obstacle," said Zhang Yu, managing director at Automotive Foresight (Shanghai) Co.

Zhang noted that most domestically produced electric cars only have a range of around 120 kilometers, and the range could be smaller if the car's air-conditioning is turned on.

Besides technological obstacles, experts noted that it is still early to promote pure electric cars in China. The market, as well as infrastructure construction, is still not ready - even Tesla would find it hard to achieve mass sales in China.

"Unlike in the US, I think the company can at best manage to sell several hundreds of its electric cars the first year in China. It is true that a small number of rich people in China care about energy-saving and are willing to try new things, but not most consumers," said Zhang.

Hybrid foundation

While BAIC announced its determination in developing pure electric cars, industry insiders at the forum noted that hybrid electric vehicles should be the current focus of new energy car development and could provide a strong foundation to developing pure electric car technology.

Japanese automaker Toyota began selling hybrid cars in 1997, and as of March this year, sales of its hybrid model Prius reached around 5 million units worldwide. Matsumoto Shinichi, vice president of Toyota China, said at the forum that the company is now considering local production for the model in order to further reduce prices in the Chinese market, and in doing so, Toyota has set up a research center in Changshu, in East China's Jiangsu Province.

"We believe that pure electric cars are the future for new energy cars. But before pure electric cars are commercialized, hybrid cars are the best option in the transition period," Chen Ping, deputy manager of the new energy branch of Chongqing Changan Automobile Co, said at the forum.

Among major automakers, Volkswagen, Audi and Cadillac have launched their own versions of hybrid models, not wanting to miss out on the starting point of the battle that represents the future product-trend of the industry.

As such, Volkswagen has signed a memorandum of understanding with leading domestic electric car producer BYD for future development of new energy cars and batteries.

Zhang from Automotive Foresight said that as the development of pure electric cars in China remains hindered by the development of battery packs and domestic charging infrastructure, hybrid cars seem a more feasible strategy for domestic cars makers.

By the end of 2012, a total of 174 charging stations were built in 25 cities in the country, according to Li Weili, an expert at the State Information Center, noting the infrastructure network is not yet established, thus private consumers are not very likely to buy new energy cars.

BYD, whose electric taxis have nudged into the market in Hong Kong and the UK, is also suffering from recent setbacks after one of its E6 models caught fire in Hong Kong due to reported battery flaws.

Supportive measures 

Despite the enthusiasm from government and car producers, new energy cars have yet to persuade general consumers.

In a forward-looking industry plan for new energy cars released in 2012, the government set a total sales target of 500,000 units of new energy cars by 2015. But China has only sold some 30,000 units of new energy cars during the past two years.

Industry watchers say further policy support is needed to help grow the market - a task the government is reportedly working on.

But experts at the forum aren't expecting new energy cars to take a market majority in the span of a decade, with Xu Daquan, executive vice president at Robert Bosch GmbH, predicting that new energy cars might even only account for around 11 percent of total car sales by 2020. Thus, increasing fuel efficiency may be the more effective path to shaping a "greener" future, he said.