CHINA STUDIES OUTPUT BAN
Carmakers warned of turbulent times over years to 2025, urged to adapt to challenge
BEIJING
CHINA has begun studying when to ban the production and sale of cars using traditional fuels, the official Xinhua news agency reported, citing comments by the country’s industry vice-minister, who predicted “turbulent times” for carmakers forced to adapt.
Xin Guobin did not give details on when China, the world’s largest car market, would implement such a ban. The United Kingdom and France have said they would ban new petrol and diesel cars from 2040.
“Some countries have made a timeline for when to stop the production and sales of traditional fuel cars,” Xin, was quoted as saying in Tianjin on Saturday.
To combat air pollution and close a competitive gap between its newer domestic carmakers and their global rivals, China has set goals for electric and plug-in hybrid cars to make up at least a fifth of Chinese car sales by 2025.
Xin said the domestic car industry faced “turbulent times” over the years to 2025 to make the switch towards new energy vehicles, and called on the country’s carmakers to adapt to the challenge.
Banning the sale of petrol- and diesel-powered cars would have a significant impact on oil demand in China, the world’s secondlargest oil consumer.
Last month, state oil major China National Petroleum Corp (CNPC) said China’s energy demand would peak by 2040, later than the previous forecast of 2035, as transportation fuel consumption rises through the middle of the century.
Song Qiuling, a senior finance ministry official, said government subsidies, intended for jump-starting the new energy auto industry, could easily be abused if held long-term and led to “mindless expansion” and excess capacity in the sector, Xinhua reported.
She said China would gradually withdraw such financial subsidies for the sector, and instead speed up the establishment of a credits accumulation policy to support the industry.
Last month, it was reported that China would delay implementing tough sales quotas for electric plug-in vehicles, giving carmakers more time to prepare.
Under the latest proposals, eight per cent of carmakers’ sales would have to be battery electric or plug-in hybrid models by next year, rising to 10 per cent in 2019 and 12 per cent in 2020, but the rules would not be enforced until 2019, a year later than initially planned, said sources.
In July, Britain said it would ban the sale of new petrol and diesel cars from 2040 to cut pollution, replicating plans by France and cities such as Madrid, Mexico City and Athens. Reuters