The pilot project, which could be replicated in other cities, underpins China’s ambitious plans to put at least half a million electric vehicles and plug-in hybrids on the road by 2015.
The country is the world’s biggest emitter of greenhouse gases — which scientists say are causing global warming — from the burning of fossil fuels and other human activities. With the largest and fastest-growing auto market in the world, China’s carbon footprint can only grow.
To bolster China’s energy security, Beijing has pronounced electric vehicles a top priority. It has earmarked $1.5 billion annually for the industry for the next 10 years in the hope that it can transform the country into one of the leading producers of clean vehicles.
But even with government support and the enthusiasm of electric-taxi customers, challenges remain if electric vehicles are to gain broader acceptance and widespread use.
Charging stations are few and far between, repair shops are hard to find and the cars are costly. Even after generous government support, a Shenzhen electric taxi costs 80 percent more than the Volkswagen Santana that ordinarily cruises the streets of Shenzhen.
“The electric car is still too expensive, and we ended up paying a lot more than for a Santana, even with government subsidies,” said Du Jun, general manager of Pengcheng E-taxi, the operator participating in the pilot project.
Local automakers like SAIC Motor and Dongfeng Motor Group have pledged large investments in greener vehicles. Global automakers, including BMW and Nissan Motor, are also working with local governments to roll out such vehicles — in these two cases the Mini E and the Leaf, respectively.
China’s investment in the electric-vehicle industry has no comparable counterpart in the United States, although the U.S. Congress is considering a bill that would allocate $2.9 billion for a program to help develop the infrastructure for widespread use of electric cars.
Germany’s cabinet agreed on plans in May to encourage the country’s electric auto sector with billions of euros in subsidies, aiming to have one million of the cars on the road by 2020. The subsidies will double state support for research and development to €2 billion, or $2.9 billion, through 2013.
For China, however, hitting its electric-vehicle targets will mean quickly winning market acceptance for an untested technology.
“I think it’s going to be a very, very long time, because the Chinese consumer, at the end of the day, is very pragmatic and wants a reliable car with a gasoline engine,” said Michael Dunne, president of the industry consulting firm Dunne & Co. in Hong Kong. “They don’t want to be the ones experimenting.”
But he said that government fleets and bus companies were more likely to buy electric vehicles.
The Chinese government picked Shenzhen, along with 12 other cities, in 2009 to lead the migration to green vehicles. Shenzhen and Hangzhou are the only ones attempting to establish e-taxi fleets.
The state-controlled Pengcheng E-Taxi, partly owned by BYD, a major domestic manufacturer of green vehicles that is backed by Warren E. Buffett, was incorporated in March 2010. Fifty e6 cabs made by BYD hit the roads in the city three months later.
“People are really interested in the car,” said Zeng Xiweng, one of the top drivers in the company. “Over 90 percent of customers start asking questions, once they get in.”
“And it’s not just me,” he added. “All my colleagues have similar experiences as well.”
Daniel Li, a Shenzhen resident, recently took a ride in an electric taxi, one of the red cars with a wavy white band around the body that have been operating in the city for more than a year.
BYD is using the pilot project to gather market feedback and make adjustments to the vehicles before rolling out the electric car nationwide.
“We had anticipated a lot of problems early on, but that did not happen and the data we’ve collected are actually better than what we got in lab tests,” said Stella Li, senior vice president of BYD.
But for Mr. Du of Pengcheng, the project’s hurdles are apparent. The company is still sitting on a big loss for which Mr. Du blames hefty upfront investments, an insufficient number of charging spots and the limited distance that an electric vehicle can travel per charge.
And then there is the cost. The BYD e6 taxi costs 179,800 renminbi, counting subsidies, compared with less than 100,000 renminbi for the Santana by Volkswagen.
In Hangzhou, a similar green pilot program stumbled when all 30 of the city’s electric taxis, which appeared on the streets in late January, were pulled from service in April after one cab’s engine compartment caught fire. The fleet resumed operations in June.
“Taxis are definitely a smart way for people to gain the kind of practical hands-on, in-the-field experience, but it will be very closely watched,” said William Russo, an industry veteran who runs Synergistics, a consulting firm in Beijing.
For their part, automakers have decided that China’s green-car effort is a good bet, but BYD has more at stake than others.
The company, 10 percent of which is owned by Mr. Buffett’s Berkshire Hathaway, has been pushing more aggressively into clean technologies, from plug-in hybrids to energy storage facilities.
The company recently raised $219 million in an I.P.O. in Shenzhen to help finance battery research.
It has sold several hundred of the F3DM plug-in hybrids in China so far, more than any other domestic automaker, and its e6 is to be available in showrooms in Beijing and Shenzhen in the second half of the year.
BYD plans to deliver 250 more e6 cabs to Pengcheng by August. It also plans to provide 200 of its electric buses in coming months to the Shenzhen public transportation system.
Green cars have yet to take off with ordinary consumers, though, despite consumer subsidies that Beijing started offering last year in some cities.
Around Shanghai, for example, a metropolitan area with a population of more than 20 million, there are only 10 registered electric cars, while the number in Hangzhou is only slightly higher at 25, according to China Business News.
“Consumers are less concerned about government interests,” said Mr. Russo of Synergistics. “They are more concerned about the economics and the real practical side of what it means to own an electric vehicle.
“They are not going to buy an E.V. to save the planet,” he continued. “They will buy it only when it saves them money.”