GM General Motors Company

By Mike Colias 

SHANGHAI -- General Motors Co.'s Chevrolet Volt electric car is finally headed to China, but it won't be wearing the iconic bow tie badge that identifies Chevy products. It will instead be sold as a Buick.

The Detroit auto giant, already a major player in China's traditional vehicle market, is planning a major push into an emerging electric-vehicle segment.

The world's biggest automotive market, China has spurred demand for battery-powered cars through a variety of government incentives given to local auto makers. Now it is pressing foreign companies to invest too, despite the industry's concerns about market demand and intellectual-property protections.

GM on Tuesday unveiled the Buick Velite 5 during a party staged on the eve of the Shanghai auto show. Based on the Volt, which was seen as a breakthrough in the U.S. when it made its debut in 2010, the new Buick travels about 70 miles on an electric charge before a small gas engine takes over to extend the range by several hundred miles, the auto maker said.

Fully-electric vehicles, such as the more capable Chevrolet Bolt sold in the U.S., appear to be in the pipeline for introduction in coming years.

A niche brand in the U.S., Buick is a big seller in China. It sold more than 1 million vehicles in China last year, No. 2 in the market behind Volkswagen's namesake brand.

The move is the start of heavier investment into China's EV market by GM and other foreign auto makers, in part to meet stringent regulations being proposed by the Chinese government. Beijing last year outlined a plan to require an escalating percentage of foreign auto makers' sales to be electrified cars in coming years or they risk having their broader sales in China curtailed.

"There's no question the government is steering some of these decisions, " said Michael Dunne, founder of Dunne Automotive Ltd and an industry consultant who spent years in China.

Until now, China's fast-growing EV market has been dominated by cheap cars from Chinese brands -- spurred by ample government incentives -- while foreign auto makers have mostly taken a wait-and-see approach. Some have privately expressed wariness about sharing their intellectual property on electrification with their Chinese joint-venture partners.

Prodded by the prospect of government mandates, a number of large auto makers recently have announced plans to push further into China's EV market, including Ford Motor Co. and Volkswagen AG. GM has said it would introduce at least 10 EVs and hybrids in China by 2020.

Some large foreign auto makers have dabbled in EV sales in China by shipping them from the U.S. or other countries. But those cars are hit with a 25% tariff, making them uncompetitive against cheaper Chinese entries.

GM and joint-venture partner SAIC Motor confirmed the Velite 5 will be built in China, allowing it to avoid the tariff and qualify for government incentives. For example, EVs are exempt from license plate fees in China that can run higher than $10,000 depending on the city. GM said the car will be priced starting around $40,000 and qualify for a $5,400 subsidy from the manufacturer.

When the Volt made its debut in 2010 in the U.S., it was lauded as a technological marvel, but sales have proved modest. Repurposing it for Buick's China lineup could help justify battery investments.

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

April 18, 2017 15:19 ET (19:19 GMT)

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