In 2012, Pang Yicheng, CEO of the industry information provider Beijing EV Future Information Technology Co, visited Shifeng Group, a manufacturer of agricultural trucks, tractors and diesel engines, based in Gaotang county, Shandong province.

Pang was amazed by the size of the assembly lines for low-speed electric vehicles, which have a range of 100 km at an average speed of 50 to 60 km per hour. The company has an annual production capacity of 200,000 of these vehicles.

"A top Shifeng executive told me, 'If large State-owned companies like SAIC Motor don't develop low-speed electric vehicles, they can still deliver a good performance. But if we don't, our company will die for sure,'" recalled Pang.

However, China's development plan for fuel-efficient and new energy vehicles and the specifications for electric passenger cars means the central government does not count low-speed electric autos as new energy vehicles.

Shifeng received strong support from the local government. In Shandong, the company's low-speed electric vehicles are allowed on roads that have speed limits of 60 to 80 km an hour. Purchasers can also apply for a temporary license plate that allows them to drive within the province.

With a market price of about 30,000 yuan ($4,895), the vehicles have become increasingly popular among farmers. The electricity bill - less than 20 yuan a month - is also attractive to those who want to keep running costs low.

"If we hope to see electric vehicles spreading quickly across China, we should take low-speed electric cars into consideration," said Zhang Junyi, principal at Roland Berger Strategy Consultants.

"If this issue is handled well by the government, it will accelerate China's urbanization process and reinforce the trend toward electric transport. But we could see problems and even serious traffic accidents if low-speed electric vehicles are left in a gray area that lacks technical standards and government administration."

(China Daily USA 08/05/2013 page7)