It's rapidly becoming one of the most famous (or infamous) features of China's most developed cities: In places like Beijing and Shanghai, the smog is so thick that it's sometimes hard to see more than a few blocks, visitors say. It's a bad problem that may be getting worse.
While the Chinese government has emphatically encouraged modernization, officials are sensitive about the clearly visible environmental side effects of China's automotive boom. In 2009, the government announced big plans to make China the world's electric-car superpower, allocating billions for research and calling for 1 million electric cars to be on its roads by mid-decade.
That was a lofty goal, and the hope was that China's domestic auto industry would take the lead. But so far, not much progress has been made -- and that may create an opening for Western automakers.
Chinese automakers face tough obstacles
China's domestic electric-vehicle leader is BYD Auto, the battery-and-auto maker that is partially owned by Warren Buffett's Berkshire Hathaway
The E6 has enjoyed some modest success as a taxi in China, but significant sales have so far eluded the company. That hasn't stopped BYD from pressing forward, though. At this week's auto show in Beijing, the company showed an all-new electric car, the Denza, the first product of a joint venture with Mercedes-maker Daimler, along with a new plug-in hybrid car called the Qin (not to be confused with the "Dear Qin" concept car that Toyota
But those models are exceptional, not least because they are so far the only home-grown Chinese EVs that look ready for the big time. Chinese automakers have faced the same obstacles to mass-market EVs that have challenged the major global automakers -- the cost and weight of batteries, indifferent consumers -- without the deep pockets and technological resources that Western automakers can bring to bear on the problem.
Meanwhile, those Western automakers are sensing an opportunity.
An opening for the big global automakers
There's definitely an opportunity, but the global automakers with big presences in China have sometimes seemed to be of two minds about the opportunity to make and sell electric cars there. On one hand, the Chinese government has a way of making incentives available to spur movement toward its goals. That seems likely to create a big market for advanced hybrids and electric cars in time.
On the other hand, automakers have understandably seemed reluctant to turn their latest EV and advanced-hybrid technology over to their Chinese joint-venture partners. That has put some at a disadvantage, as they've had to import their latest models -- imported cars are taxed heavily in China.
Still, many are pressing on. General Motors
Nissan, which has won global acclaim for its all-electric Leaf sedan, recently announced that it will make an electric car in China with its joint-venture partner, Dongfeng. The upcoming car, called the Venucia, is expected to be a close mechanical relative of the Leaf. It's due by 2015. And Volkswagen, which trails only GM in the size of its Chinese presence, has said that it will begin making EVs in China by 2014.
Ford
And given the way the Chinese government tends to work, it's likely that that demand will happen.
Ford isn't the only American company investing heavily for growth in emerging markets. Quite a few American companies are finding strong growth thanks to savvy execution in fast-growing new markets like China and Russia. Motley Fool analysts have identified three big-name companies that are particularly well positioned to profit, and you can learn more right now with our new free report, "3 American Companies Set to Dominate the World." It's completely free for Fool readers, but only for a limited time -- so grab your copy now.
