China has issued its anticipated new regulation requiring most automakers to sell a minimum number of new energy vehicles (NEVs) (battery-electric and plug-in hybrid) annually from 2019 as part of the country’s broader effort to curb carbon emissions by reducing the use of fossil-fuel-powered vehicles.
The new policy from China’s Ministry of Industry and Information Technology requires that sales of NEVs reach a threshold equivalent to 10% of an automaker’s total sales in 2019 and 12% in 2020. The regulation applies to carmakers that produce or import more than 30,000 conventional vehicles annually—lower than the 50,000 threshold earlier mentioned in a policy draft—and includes more vehicle companies in the evaluation system.
Compared with the draft regulation, the new policy eliminates an 8% share quota for 2018, giving companies more time to expand their production capacity. If car companies fail to meet their quotas, they will either have to buy credits from other automakers or face a fine, the ministry said. The measures will be effective from 1 April 2018.
Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), said China is stepping up efforts to promote the development of NEVs in the world’s largest automobile market. As one of the world’s largest NEV markets, about 53,000 new energy cars were sold in China in August, up 73% year-on-year, data from the CPCA show.
The ministry said earlier this month it was working on a timetable to phase out fossil-fuel powered vehicles, though it did not specify details.
Zhang Zhiyong, founder and CEO of Wenfeng Automobile Consultancy, said electric and plug-in hybrid vehicles are giving Chinese companies new opportunities compared with conventional cars powered by combustion engines.
China lags behind Western countries in the fossil car era. But we can prevail in the electric car era by tapping into our big market demand and new technologies.—Zhang Zhiyong