Last month, China’s government issued new rules that require automotive companies to sell more alternative-energy cars in the country. Beijing also plans to eventually get rid of all internal combustion engines in new cars, maybe as soon as 2030. Thus, worldwide automakers are speeding up their efforts to develop electric vehicles and meet demand in China.
China is the world’s largest auto market, even though it taxes imported cars 10 times more than the U.S. Beginning in 2019, China requires electric cars to make up at least 10 percent of each automaker’s output. The minimum percentage increases to 12 percent in 2020.
Beijing has made it a priority to create favorable conditions for electric vehicle stakeholders. In several of the country’s major cities, including Beijing and Shanghai, electric vehicles are exempt from license-plate lotteries and high registration fees that apply to cars with internal-combustion engines.
Monetary subsidies for electric cars provided by China account for about 23 percent of a midsize electric car’s total price. The U.S. provides 18 percent of monetary subsidies for electric vehicles, higher than Germany’s 13 percent and Japan’s 10 percent. After 2020, China will shift away from direct subsidies and provide nonmonetary incentives.
The new quota system allows the auto industry to take on more of the financial burden for electric cars and reduces the Chinese treasury’s involvement which has paid for research grants and subsidies for electric car developers and buyers.
China currently has the highest number of electric vehicles on the road, surpassing the number in the U.S. for the first time this year. Chinese consumers have about 75 different electric vehicle models to choose from, more than any other country. In 2016 alone, about 25 new electric vehicle car models were introduced in the country.
The Chinese Ministry of Industry and Information Technology stated that new energy vehicles, including battery-powered and hybrid cars, should account for a fifthof auto sales by 2025. India, France, the United Kingdom and California are also reviewing plans to limit or ban regular gas and diesel engines between 2030 and 2040.
Source : Forbes