Some of China’s leading car makers are coping with stricter emission standards by designing models that will use a low-cost battery technology.

Companies including Geely Automobile Holdings Ltd. and FAW Group Corp. in the next two years will start selling gasoline-powered cars that have 48-volt batteries to boost power to steering and other devices, according to a report in The Wall Street Journal.

These cars offer a lower-voltage building block to better fuel economy than the about 200-volt systems in the best-selling gasoline-electric hybrids. The 48-volt hybrids can boost fuel economy by 15 percent, which is less than the 25 percent to 30 percent improvement by existing hybrids, but they cost less.

Demand is expected to grow for 48-volt batteries as cars add more and more electronic systems that require more power than a traditional 12-volt battery can deliver. Volkswagen, BMW and General Motors Co. say they are working on 48-volt systems.

“What’s nice about the 48-volt systems is that you are getting a lot of the same benefits of a full hybrid at 30% of the cost,” Dan Hearsch, a partner with AlixPartners, told the newspaper.

Beijing is taking steps to modernize its auto industry while reducing pollution in a country that has the most car sales in the world. The government provides incentives to buy electric cars from local manufactures who face stricter emissions standards.

Chinese will be required to have average fleet fuel-efficiency achieve about 47 miles-per-gallon by 2020, according to the WSJ.

“We see all major Chinese auto makers on or sourcing 48-volt batteries [and] they will phase in over the next three years,” Jason Forcier, chief executive of A123 Systems, a Livonia, Michigan-based battery maker that was bought by a Chinese company in 2013, told the newspaper.

Meanwhile, the collapse in oil prices since 2014 has reduced demand for hybrid cars in the U.S.

Sales for hybrids and alternative energy cars in the U.S. were down 13.2 percent in recently released figures by Kelley Blue Book cited by the San Diego Union-Tribune.
Luxury compact sports utility vehicles surged 36.8 percent and mid-sized pickup trucks were up 40.8 percent.

"It's not hugely talked about," Jeremy Acevedo, an auto industry analyst for Edmunds.com, told the newspaper. "The sales of hybrids and plug-ins have been waning."

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