RPT-Electric cars are a big chance for China -McKinsey

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By Emma Graham-Harrison

BEIJING, Oct 29 (Reuters) - China should push electric cars to curb its dependence on imported oil and foreign automobile technology, although they offer smaller cuts in carbon emissions than alternatives like hybrids, McKinsey and Company said.

In two decades it could create a world-leading industry and a domestic market alone worth up to 1.5 trillion yuan ($219.4 billion), even if less than a third of drivers go electric, the consulting firm said on Wednesday in a report, "China Charges Up".

"China has a compelling case for embracing electric vehicles," said the report, which weighed up oil imports, the cost to consumers, the potential for innovation, as well as carbon emissions.

"While a handful of firms in Japan and North America are making strides in developing electric vehicles, no nation has yet emerged as the clear leader in this sector," it added.

The world's number two crude oil consumer already churns out millions of automobiles for a growing middle class hungry for a better lifestyle. It relies on imports for nearly half its oil.

If China continues current growth rates it will almost double oil imports by 2030, the report said, but greater use of electric cars would cut this growth by around a quarter.

For consumers, the vehicles will not be cheap up front. They will have to pay a premium of about a quarter, 30,000 yuan ($4,387), for electric vehicles.