China sets 2019 dead­line for au­tomak­ers to meet green-car sales tar­gets

The Gulf Today - Business - - 4international -

BEI­JING: China has set a dead­line of 2019 to im­pose tough new sales tar­gets for elec­tric plug-in and hy­brids ve­hi­cles, slightly re­lax­ing an ear­lier plan to launch the rules from next year that had left global au­tomak­ers wor­ried about be­ing able to com­ply.

Car mak­ers will need to amass cred­its for so-called new-en­ergy ve­hi­cles (NEVS) equiv­a­lent to 10 per cent of an­nual sales by 2019, China’s in­dus­try min­istry said in a state­ment on Thurs­day. That level would rise to 12 per cent for 2020.

A sin­gle ve­hi­cle can gen­er­ate mul­ti­ple cred­its mean­ing the pro­por­tion by NEVS by vol­ume would likely be lower.

The tar­gets, an­nounced by the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy (MIIT), closely mir­ror pre­vi­ously an­nounced plans, but re­move an ex­plicit 8 per cent quota for 2018, in ef­fect giv­ing carmakers an ex­tra year grace pe­riod.

The quo­tas are a key part of a drive by China, the world’s largest auto mar­ket, to de­velop its own NEV mar­ket, with a long-term aim to ban the pro­duc­tion and sale of cars that use tra­di­tional fu­els an­nounced ear­lier this month.

Global au­to­mo­tive man­u­fac­tur­ers, how­ever, had urged a soft­en­ing of the pro­pos­als for all-elec­tric bat­tery ve­hi­cles and elec­tric plug-in hy­brids.

Un­der the rules, carmakers will re­ceive cred­its for new-en­ergy ve­hi­cles in­clud­ing plug-in hy­brids and fully elec­tric cars that can be trans­ferred or traded. Firms with an­nual sales vol­umes above 30,000 units will need to com­ply with the tar­gets.

These cred­its - which will vary de­pend­ing on the range and per­for­mance of the ve­hi­cle - will be used to cal­cu­late if firms have met their quota, a sys­tem which would likely mean the ac­tual pro­por­tion NEVS made up of to­tal sales was lower.

OPIN­ION OF EX­PERTS

“The rules could re­sult in the pro­duc­tion of more than one mil­lion EVS an­nu­ally in China by 2020, or about 4 per cent of sales,” Si­mon Mui, a trans­port and en­ergy ex­ert at the Us-based Nat­u­ral Re­sources De­fense Coun­cil wrote in note. Carmakers were in gen­eral pos­i­tive about the move.

“We wel­come the Chi­nese auto in­dus­try’s shift to­wards greater adop­tion of NEVS and will com­ply with rel­e­vant reg­u­la­tions pre­sented by au­thor­i­ties,” Ford Mo­tor Co said in a state­ment re­spond­ing to the an­nounce­ment.

Gen­eral Mo­tors Co said it would “strive to com­ply with the NEV manda­tory re­quire­ments”, though it added “con­tin­ued joint ef­forts by the gov­ern­ment and com­pa­nies are es­sen­tial to build broad-based con­sumer ac­cep­tance for NEVS”.

“GM has suf­fi­cient ca­pac­ity to man­u­fac­ture NEVS in China,” it said in a state­ment. Ja­pan’s Honda Mo­tor said it planned to launch an elec­tric bat­tery car in China next year and would “try to ex­pand our lineup of new en­ergy ve­hi­cles” to meet the quo­tas.

China is keen to com­bat air pol­lu­tion and close a com­pet­i­tive gap be­tween its newer do­mes­tic au­tomak­ers and global ri­vals. It wants to set goals for elec­tric and plug-in hy­brid cars to make up at least a fifth of Chi­nese auto sales by 2025.

Reuters re­ported in Au­gust that China would de­lay the im­ple­men­ta­tion of the NEV quo­tas un­til 2019, giv­ing global au­tomak­ers more time to pre­pare.

Mean­while, China stocks were firm on Fri­day, buoyed by hopes of fur­ther re­forms to the main­land’s state-owned en­ter­prises and by con­sumer firms as in­vestors bet shop­pers would spend big dur­ing the up­com­ing week-long Na­tional Day hol­i­day.

The blue-chip CSI300 in­dex rose 0.4 per cent, to 3,836.50, while the Shang­hai Com­pos­ite In­dex gained 0.3 per cent to 3,348.94 points.

For the month, the CSI300 gained also gained 0.4 per cent but it posted a solid 4.6 per cent rise for the quar­ter, tak­ing its gain so far this year to around 16 per cent. Much of the gains have come from re­sources stocks thanks to the coun­try’s year-long con­struc­tion boom.

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