China change the rule: electric cars quota from 2019

8 years ago - Published in Commodities, Finance

China will require automakers to comply with a cap-and-trade auto emission rule starting from 2019, the Ministry of Industry and Information Technology announced on Thursday. Car companies with annual sales of more than 30,000 vehicles would have to meet a quota of 10 percent being New Energy Vehicles (NEV's), meaning all-electric battery vehicles or plug-in hybrids, it said in a statement.
That level would rise to 12 percent of sales in 2020, the ministry added, and automakers which weren't able to meet the quota would have to buy credits.

Beijing announced plans earlier this month to phase out petrol vehicles by an unspecified date, but it has also been preparing rules to impose production quotas on car companies.
China had released in June a draft regulation that would have imposed from next year a complex credit system for companies to dedicate a portion of their production to new-energy vehicles—electric and hybrids.
But the rules will now be applied from 2019, the industry and information technology ministry said Thursday.
Under the system, all types of vehicles will receive a certain number of credits, with green cars getting more points. A company's total credit score will be calculated based on its annual sales.

The previous draft would have set the green credit at eight percent in 2018, but several automakers were concerned they would not be able to meet the deadline.
German automaker Volkswagen, the market leader, acknowledged that meeting the target so soon would not be easy.
VW sold just a few hundred "green" cars among the four million vehicles it sold in China in 2016, but the German manufacturer plans to sell around 400,000 new-energy vehicles in the country by 2020 and 1.5 million by 2025.
German Chancellor Angela Merkel had personally asked for a compromise in talks with Chinese Premier Li Keqiang earlier this year, according to the German newspaper Handelsblatt.
Other foreign automakers are also stepping up efforts to produce green cars in China.

Chinese manufacturers are the biggest producers of electric vehicles worldwide, making 43 percent of the total last year, according to consultancy McKinsey & Co.