China's Ascendant NEV Market
2019-01-16 14:23 Wednesday
China has maintained its hold as the world's largest new-energy (NEV) market for three consecutive years, with 777,000 NEVs sold in China in 2017 alone. By 2025, China plans to sell 7 million cars every year, with 20% of that total, projected to be plug-in hybrid or battery-powered vehicles.
The latest regulations in China place emphasis on environmental protection and sustainable development. All major automakers operating in China, from global giants such as Toyota and General Motors, to domestic players BYD and BAIC Motor, have to meet minimum quotas for NEV production.
Carmakers that don't meet quotas can purchase credits from competitors that exceed their quotas, or face fines. The regulations are expected to reduce China's dependence on imported oil and improve air quality in Chinese cities.
Volkswagen AG, which sold almost 40% of its vehicles in China last year, says it will introduce about 40 locally-produced NEV models in China within the next decade. "Volkswagen Group China will meet the government's targets," the company said in a statement.
Furthermore, the Chinese government has decided to increase the proportion of NEVs in the national bus fleet to at least 10% by 2020, meaning that from 2020, at least half of newly-purchased buses will be NEVs. Also by 2020, all newly-purchased taxis and ride-hailing vehicles in some Chinese cities will be NEVs.
Other methods China has utilized to encourage NEV purchases are tax exemptions and subsidies. Subsidies range as high as $7,900 for an all-electric vehicle with a range of more than 400km, which can offset almost one third of the sticker price of a BYD e5 electric car. The subsidies will remain effective for three years, before being phased out in 2021.