Global Automakers Urge China To Soften New Energy Vehicle Mandates

Automaker industry groups are urging China to ease up on quotas for selling plug-in electrified and fuel cell vehicles under the national government’s proposed and pressing timetable.

A letter from four trade groups, dated June 18 and viewed and reported today by Reuters, protests a major shift in the country’s new energy vehicles policy. The government is reducing generous subsidies and is considering implementing a staggered system of sales quotas starting next year.

It could mean that at least 20 percent of Chinese new vehicle sales must be NEVS – battery electric, plug-in hybrid, and fuel cell vehicles – by 2025. A staggered system of quotas will begin next year.

Automakers had been protesting a proposed 8 percent NEV mandate by 2018.

The June letter, addressed to China’s Minister of Industry and Information Technology, Miao We, was signed by officials from four global industry groups. That included the American Automotive Policy Council, the European Automobile Manufacturers Association, the Japan Automobile Manufacturers Association, and the Korea Automobile Manufacturers Association.

The letter included proposed changes to the rules being considered that could address concerns while still meeting the government’s goals. One requested change is a delay in implementing the quotas; another suggestion is reconsideration of the penalties for those automakers failing to meet the quotas. One penalty could be banning automakers from importing and manufacturing conventional vehicles.

The proposed changes also ask the national government to consider that equal treatment be given to Chinese and foreign automakers. Foreign carmakers are banned from receiving full subsidies for their NEVs and batteries.

Most all of the major automakers have forged joint ventures with Chinese automakers to bypass tariffs, and penalties such as this one included in the proposed NEV rules. Tesla has not done so as of yet, and has to charge nearly double the price for its electric cars to cover tariffs and delivery fees. The electric carmaker has been in talks with Chinese government officials about setting up a production plant there and potentially forging a JV.

The industry letter also requested that plug-in hybrid electric vehicles be given more credits in the policy. It also asked that automakers be allowed to accrue credits from sold cars and carry them forward to later model years. The ability to purchase NEV credits from the government is another request being asked for.

Over the past year, the national government has been working on a new policy using California’s zero emission vehicle rules as the benchmark. Governor Jerry Brown and California Air Resources Board chair Mary Nichols toured China last month to discuss the state’s ZEV policies with government and industry officials.

SEE ALSO:  California and China Collaborating To Lead ZEV Deployment

China has become the leading global market for plug-in electrified vehicles in recent years. About 43 percent of PEVs produced last year were in China, according to McKinsey & Co.

New energy vehicles made for less than 2 percent of total new sales last year in China, Reuters previously reported.

Along with reducing severe air pollution in heavily populated cities, China is looking to establish a competitive economic edge over automakers based in the U.S., Europe, and Japan. China now has the world’s largest overall new vehicle sales market, and is also seeking to offset the increasing air pollution that goes with it.

Reuters

 


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