China Considering California-Style Automaker EV Mandates
As a possible addition to its already substantial electric vehicle incentives, China is reportedly considering the introduction of California-style automaker mandates for electric vehicles — requiring that a certain amount of the vehicles produced be electric ones.
A draft document prepared by the National Development and Reform Commission reveals that the proposed rules would mandate that “certain automakers produce or import new-energy vehicles in proportion to the number of fuel-burning autos they sell.”
Firms that then didn’t manage hit carbon dioxide emission reduction targets would then be required to purchase credits (potentially produced in excess by other manufacturers), or to pay fines as high as 5 times that of the average price of the available credits.
“Without question, this will be good for the industry and will promote the development of all types of clean-energy vehicles,” stated Ye Shengji, deputy secretary general of the China Association of Automobile Manufacturers, when speaking at a recent press conference in Beijing.
Auto News provides more, noting that, “China surpassed the US as the largest market for electric vehicles last year and wants sales of new-energy vehicles to exceed 3 million units a year by 2025. To encourage production and sales of such vehicles, central and local governments have spent 15 billion yuan ($2.3 billion) on subsidies since 2009, according to state-run China Central Television. The government plans to phase out subsidies after 2020.”
The draft document referenced above explained the need for the mandates thusly: “Given that some key automakers lack the motivation to develop new energy vehicles, there is concern that development in the industry will suffer once the fiscal policies are weakened or dropped.”
Notably, the mandate would only be forcibly applied to large manufacturers. It would be voluntary for others. The exact cutoff point between “large” and “small” is unclear at this point.
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