BEIJING MULLS RELAXING OUTPUT QUOTA
Industry feedback shows proposed 8pc production target by 2018 overly ambitious
CHINA is considering dialling back or delaying proposed measures aimed at pushing carmakers to produce more electric vehicles, after industry feedback that the targets are overly ambitious.
Under draft rules released in September for public consultation, carmakers will be required to obtain a new-energy vehicle credit score of eight per cent next year, derived from different weightings assigned to various types of zero- and low-emission vehicles.
Companies that fail to meet the requirement face fines or have to buy credits from those that exceeded the minimum.
Average production of new-energy vehicles last year might have contributed only about three per cent of the score required, five percentage points short of the proposed 2018 target, said the China Association of Automobile Manufacturers.
German Economy Minister Sigmar Gabriel told German media in November that he expressed the view to his Chinese counterpart that the 2018 targets were not attainable.
Miao Wei, China’s Minister of Industry and Information Technology, said on Sunday his ministry was considering either lowering the credit requirement in percentage terms or delaying the implementation date.
“We are still working on the regulation,” said Miao at the annual session of the National People’s Congress. “It may be finalised around May or June.”
Electric vehicle sales plunged in January after the government cut subsidies by more than a fifth starting this year, raising the question of whether the country can sustain demand for green cars without generous grants.
Sales of new-energy vehicles (NEVs), the term China uses to refer to battery-electric vehicles, plug-in hybrids and fuel-cell cars, dropped 74 per cent in January from a year earlier to 5,682 units, according to data released by the auto association.
“The current proposed NEV quota is indeed too ambitious and early for the industry,” said Robin Zhu, an analyst with Sanford C. Bernstein in Hong Kong.
“Firstly, most of the NEV models are still in the process of development and secondly, the market has not developed that big demand for NEVs. It is not realistic to ask carmakers to suspend their sales of combustion vehicles so as to be compliant for the NEV quota.”
A lowering of the credit requirement or delay in implementation could buy more time for carmakers including Volkswagen AG and General Motors Co to expand production of such NEVs.
An attendant with an electric car at a charging point in Beijing. Sales of new-energy vehicles in China dropped 74 per cent in January from a year earlier to 5,682 units.