China’s industry ministry has said it might temporarily ease quotas designed to boost production of electric cars, in an attempt to help carmakers in the world’s biggest market revive sales badly bruised by the coronavirus pandemic.
China has some of the world’s strictest rules regarding the production of fossil-fuel vehicles, as it battles unhealthy levels of air pollution in its crowded cities.
Reuters Newsagency reports carmakers in China are obliged to manufacture new energy vehicles (NEVs), including all-electric, plug-in hybrid and hydrogen fuel cell vehicles, to win “points” to make up for a portion of the negative points they incur when they produce internal combustion engine vehicles.
Depending on the present situation, the Ministry of Industry and Information Technology said in a policy that it might temporarily adjust the quotas and allow carmakers to use the green points they generate next year to offset their negative points this year.
Industry officials consider it a supportive move as carmakers can manage vehicle production better with less policy impact.
Reuters exclusively reported the policy discussion in April, citing people familiar with the matter.
Sources also told Reuters that China would delay implementation of some emission rules by six months, which China’s state planner later confirmed.
The temporary easing of NEV quotas is likely to allow companies to delay model launches, which have more costly technology than conventional vehicles, and also discourage them from aggressive marketing.
At the same time China has re-classified petrol-electric hybrid vehicles so they get more favourable treatment than all-petrol or diesel counterparts under new clean car rules, making it easier for carmakers to meet environment quotas and offer more choice.
Those rules have pushed both domestic and international carmakers including Tesla and Volkswagen to spend billions of dollars on the development and production of new energy vehicles (NEVs), such as all-electric, plug-in hybrid and hydrogen fuel cell vehicles.
Plug-in hybrid technology differs from that of petrol-electric hybrid vehicles.
However, its points system for manufacturers has been criticised for offering few incentives for carmakers to improve petrol cars’ efficiency.
The policy published by China’s Ministry of Industry and Information Technology allows carmakers to gradually make more petrol-electric hybrids and less of the more costly all-electric vehicles from 2021 through 2023.
Such hybrids would still be considered fossil-fuelled but re-classified as “low fuel consumption passenger vehicles”.
Significantly, the number of negative points incurred for making petrol-electric hybrids will be less than for petrol-only vehicles.
That could see more of those traditionally powered vehicles replaced with petrol-electric hybrids, experts and industry officials said, because when carmakers produce those hybrids, they would not have as many negative points to make up for.
China hopes NEVs will account for around a quarter of all vehicles sold in the country by 2025.
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