Honda throws caution to wind for piece of China EV market

McKinsey's research also suggested that public transport fleets such as bus fleets are likely to be in the first wave of EV adopters in China, rather than consumers. McKinsey estimated that the total electric bus fleet could grow to 100,000 units by 2016.

"China still has a very good chance of realizing its aspirations to become a global leader in electric vehicles. Achieving this goal will require stakeholders across the electric vehicle industry value chain to calibrate both their expectations and their actions," said Krieger.

The State Council last week adopted the long-awaited industry development plan on energy saving and new energy vehicles, saying that pure electric vehicles and plug-in hybrid vehicles will be the strategic orientation for China to ease its energy and environment challenges.

This news will certainly be music to the ears of Honda’s board members, but how markets react may be a different tune altogether, especially if key proprietary technologies are suddenly seen to be popping up from some very unlikely sources, as other ultra-high tech industries have experienced in China.