China’s new policy to lead to EV-only future

China has imposed a new law regarding the production of new-energy vehicles that includes plug-in hybrids, battery EVs and fuel cell vehicles. From January 2019, car makers in China would have to produce a significant portion of such vehicles.

The world’s largest car market would enforce a credit-based system which car makers must abide by. Those producing green vehicles would get credits, which can be sold to other companies as well. Car makers not meeting the credit quota would be fined and face a possibility of shut down of their assembly lines.

By 2025, authorities in China want around 7 million hybrid or battery powered cars to be sold every year. This would translate to around 20% of the total car sales. The first-year target is a 10 percent credit based on factors like the range of the EVs and the propulsion used for the vehicles. The rules will apply to all car makers producing or importing more than 30,000 cars in China. The target would rise to 12 percent in 2020, with the ultimate goal being phasing out of all conventionally powered cars.

BMW has planned to launch two more battery EVs, while Toyota, FCA, Honda and Mitsubishi plan to sell one SUV made by Guangzhou Automobile Group under different badging.

Source: Bloomberg