China to start new energy vehicle production quota from 2019

BEIJING: China ordered most automakers to sell a minimum number of new-energy vehicles every year starting 2019, giving them more time to comply with a key policy shift in the world’s largest market.

Under the so-called cap-and-trade policy, automakers will be required to obtain a NEV credit score of at least 10% in 2019, and 12% in 2020, the Ministry of Industry and Information Technology said in a statement posted on its website.

Carmakers that have production of, or import, more than 30,000 “traditional” vehicles annually must comply. If they don’t, com- panies must buy credits or face fines. Positive credits from 2019 can be carried over to the next year.

China previously proposed to start implementing the policy next year, a target that was viewed by automakers as overly ambitious. China, which has vowed to cap its carbon emission by 2030 and curb worsening air pollution, joins the UK and France in seeking a timetable for the elimination of vehicles using gasoline and diesel.

The country needs to use alternative energy to power some 200 million vehicles that ply its roads and reduce dependence on oil imports.

“Political considerations must have weighed in on the decision to delay the commencement date by a year,” said Cao He, chairman of Quanlian Auto Investment Management Co.

“Local automakers will likely benefit from this as they will have more buffer time to get ready on the technology front.”

Earlier this month, China’s government said it’s working on a timetable to phase out fossil-fuel powered vehicles, helping lift shares of local automakers such as BYD Co, a carmaker that’s backed by Warren Buffett. While 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 such as Geely Automobile Holdings Ltd have also found considerable success in the market, thanks to generous government subsidies.

BYD tops the new energy vehicle makers in sales in the first seven months of this year, delivering 46,855 electric and plug-in hybrid vehicles, resulting in about 30,000 credit points in the first half, according to the company’s calculation.