China will force most carmakers in the country to start manufacturing electric vehicles in 2019 — a one-year reprieve from an earlier proposal that foreign auto companies had fought against, but still the strongest national initiative yet to spur alternatives to petrol and diesel cars.
Under a long-awaited, China will set gradually escalating quotas for pure-electric cars, plug-in hybrids and fuel-cell cars, as Beijing seeks to curb air pollution and nurture a domestic green-car industry.
The quotas will be enforced through a credit-score system in which carmakers will gain points for production of pure-electric, plug-in hybrid and fuel-cell cars.
In 2019, most local and foreign carmakers must earn points equivalent to 10 per cent of vehicles they produce in China and import into the country, the Ministry of Industry and Information Technology said in a statement. That rises to 12 per cent in 2020.
The plan applies to carmakers that produce or import 30,000 cars or more annually.
China’s aggressive push for more electric cars in the world’s biggest auto market is having a ripple effect globally, compelling carmakers to pursue an electric agenda despite consumer reservations, according to industry experts.
China’s push, as well as recent scandals over carmakers falsifying fuel emissions data, have also spurred European regulators to consider tighter regulations. “China has triggered the worldwide electric car festival,” said Takaki Nakanishi, an automotive analyst who heads Nakanishi Research Institute in Tokyo. “The adoption of electrification regulations is speeding up globally.”
In a partial victory for foreign car manufacturers, China agreed to delay implementation until 2019, instead of next year as originally envisioned in draft proposals. Among other objections, carmakers said they would be hard-pressed to build the needed manufacturing infrastructure by next year.
In another concession, the Ministry of Industry and Information Technology, which oversees the auto industry, said even if targets are not met the first year, carmakers will not be punished. Any negative credits in 2019 can be carried over to the following year, it said, which means that actual enforcement starts at the end of 2020.
However, even in its watered-down form, the quota system is a daunting prospect for car manufacturers who must now retool factories and rush electric vehicle concepts into production.
“Even though the 2018 quota has been scrapped, this is still not an easy hurdle for us,” said Keitaro Nakamura, a China-based spokesman for Japan’s Honda. Honda, which sold 1.25 million vehicles in China last year — none of which were electric cars or plug-in hybrids — plans to start selling made-in-China pure-electric vehicles next year.
China is notorious for air pollution in its major cities, which the government says it is committed to reducing.
The new quotas, the government said, are meant to further “alleviate energy and environmental pressures”. China recently said it plans to eventually ban traditional petrol and diesel vehicles, but has not set a timetable.
Foreign carmakers who build cars in China must do so through joint ventures with Chinese partners to avoid steep tariffs. Along with the deadline for implementation, foreign carmakers were concerned that the mandates would essentially force them to give away proprietary technology to their Chinese partners.
Extracted from The Australian.