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China Sales Quota For Electric Vehicles, A Market Strategy Or Market Protectionism?

March 19, 2018

 

An interesting point of view and a very important factor indicated by Jimi Beckwith of autocar. co.uk.

Car makers are worried that China’s EV electric sales targets are too strict and have urged the government for more flexible legislation.

 

Car makers from across the industry have written a letter asking China to reconsider its plan to introduce stringent sales quotas for electric vehicles

 

The Chinese government is planning to introduce quotas that determine how many of each firm's car sales must be electric-powered machines, with credits rewarding the sale of electric or plug-in hybrids. The plans calls for 8% of each firm's sales to feature electrificiation by next year, 10% the following year, and 12% by 2020. By 2025, China wants a fifth of all sales to be what it calls NEVs (New Energy Vehicles). 

 

The letter, which comes from firms representing about 70% of the global car industry including companies from Europe, Korea, the US and Japan, calls for China to push back the plans by up to three years. It also asks China to soften what they deem to be over-stringent levies on car makers, based on the number of EVs sold, reports Reuters. The letter was originally cited in a WirtschaftsWoche article. 

 

China’s torrid sales growth in the electric vehicle segment faced some hiccups in January and February thanks to some bureaucratic red tape that saw no plug-in eligible for subsidies for ~7 weeks while waiting on a new approved OEM/model list.

 

Chinese premier Li Keqiang and German chancellor Angela Merkel had originally agreed to less stringent quotas.

 

Reuters reports that the industry deems the plans too ambitious for the fledgling electric vehicle market, despite most firms planning a major expansion of their electric and plug-in ranges. 

 

The industry suggested in the letter that the quotas are instead based on the individual car makers’ production volume, in order to avoid unfairly high comparative quotas on smaller-volume companies. 

 

Toyota CEO Akio Toyoda already previously pushed back against the plans, arguing that hybrid technology was the only practical, cost-effective bridge until hydrogen powertrains come to the fore.

 

Credit Source; autocar.co.uk

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