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China Sets Ambitious Targets, Helps Set Global EV Trend

placeholder+imagePosted on: 10/15/2017

China has joined the UK and France in setting goals and a timetable for the elimination of fossil-fuel powered vehicles. China has vowed to cap its carbon emissions by 2030 and curb worsening air pollution which has a negative impact on public health.  Reducing emissions for the over 200 million vehicles traversing the country’s roads will contribute significantly to that plan and additional will support China’s auto market. China is also host to the world’s largest scale of fossil-fuel vehicle production facilities.  


On September 28th, China formalized a set of cap and trade policies which include aggressive sales targets for electric and hybrid vehicles, though the country relaxed the initial planned deadline by a year to 2019.  Under the plan, automakers manufacturing or importing more than 30,000 traditional vehicles annually must obtain new energy vehicle (NEC) credits linked to the production of various types of zero and low emission vehicles of at least 10 percent of sales starting in 2019, rising to 12 percent in 2020.  Earlier plans had included a target of 8% of sales for 2018, but the plans were then amended to give carmakers more time to comply.  

Some news reports focused on the one year delay of sales targets from earlier plans, but according to Jon Voelker at GreenCarReports, the global auto industry has been “changed forever” by this announcement. The standards are the most aggressive in the world, beating out California and other countries for the title.  

The rules could result in the production of more than one million EVs annually in China by 2020, or about 4% of sales and position China as the dominant leader in the global EV market.  The country plans to increase NEV sales to approximately one fifth of all auto sales by 2025.    

Environmental groups reacted to the news with jubilation, often noting the pervasive and hazardous air pollution in China's populated areas and the country's aggressive move toward lower-carbon and renewable energy.

The U.K. said in July that it will ban sales of diesel- and gasoline-fueled cars by 2040, two weeks after France announced a similar plan to reduce air pollution and meet targets to keep global warming below 2 degrees Celsius (3.6 degrees Fahrenheit).

While many global manufacturers from billionaire Elon Musk’s Tesla Inc. to Nissan Motor Co. and General Motors Co. are racing to grab a slice of the electric-vehicle market in China, local manufacturers that have found considerable success thanks to generous government subsidies.

Tesla said in June that it’s working with the Shanghai government to explore local manufacturing, a move that would allow it to achieve economies of scale and bring down manufacturing, labor and shipping costs.

As part of efforts to boost sales of electric vehicles, foreign automakers are setting up new joint ventures in China. Ford Motor Co. is exploring setting up a joint venture to produce electric vehicles in China with Anhui Zotye Automobile Co. while VW has partnered with Anhui Jianghuai Automobile Group Corp. to make electric cars.


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