China’s central government offers subsidies of up to CNY55,000 (US$7,981) for new electric vehicles. Source: Shutterstock

Carmakers in China brace for mandatory electric car production rules

GLOBAL carmakers operating in China could be asked to ensure electric cars account for up to eight percent of their total sales in the country.

The draft rules for the world’s largest car market are still under discussion, according to The Financial Times (FT), but could come into effect as early as next year.

It is thought carmakers who miss the yearly target will be forced to buy costly “credits” from competitors who exceed the target. The quota is also expected to grow in subsequent years.

The legislation is aimed at encouraging local production of battery-powered cars by allowing makers to trade credits. Different cars will score differently within the quota, with fully electric cars counting for more than hybrid cars.

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There is already a selection of incentives for carmakers to produce electric vehicles locally. For example, the central government offers subsidies for new EVs up to CNY55,000 (US$7,981), while local government subsidies are of a similar value.

Although, these have decreased by 20 per cent this year and are to be phased out over time. Eventually, the new quota scheme will replace all incentives.

“It’s early days — and how [the rules] are implemented remains to be seen,” Ian Robertson, a member of BMW’s board, told the FT.

He said the carmaker was preparing to meet the goals, regardless of what they were.

Furthermore, Ford vice-president Trevor Worthington told the newspaper it was meeting weekly with the Chinese government to discuss policies. The company is planning to bring its first hybrid vehicle to China next year.

Chinese-owned Volvo is preparing to introduce its first fully electric car to China in 2019.

In 2016, China bought 300,000 electric vehicles and was the largest purchaser in the world.






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