Automakers need to obtain 10% of credits from NEVs in 2019
Companies with annual sales over 30,000 units need to comply
China issued a new regulation that mandates most automakers to sell a minimum number of new-energy-vehicles every year from 2019, a key step in the government’s efforts to phase out fossil-fuel powered vehicles from the world’s biggest auto market.
Under the so-called cap-and-trade policy, automakers will be required to obtain a new-energy-vehicle credit score of at least 10 percent in 2019, and 12 percent 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, automakers must buy credits or face fines, the regulator said.
China, which has vowed to cap its carbon emission by 2030 and curb worsening air pollution, joins the U.K. 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. China’s government said earlier this month it’s working on a timetable to phase out fossil-fuel powered vehicles.
China’s government previously proposed to start implementing the policy next year, a target that was viewed by automakers as overly ambitious. The new rules would buy automakers more time to expand production of new-energy vehicles, or NEVs.
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 have also found considerable success in the market, thanks to generous government subsidies.
Warren Buffett-backed BYD Co. tops 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.
Beijing Electric Vehicle, the EV division of state-owned BAIC Motor, followed with 36,084 units. By comparison, GM has sold 738 cars that run on electricity since it launched the Velite 5 plug-in hybrid model at the Shanghai auto show this April.
As part of efforts to boost sales of electric vehicles, foreign automakers are setting up new joint ventures in China. Ford Motor Co. is exploring setting up a joint venture to produce electric vehicles in China with Anhui Zotye Automobile Co. while Volkswagen AG has partnered with Anhui Jianghuai Automobile Group Corp. to make electric cars.