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The Chinese government wants more people driving electric and hybrid vehicles, & has implemented policies to tweak demand. They appear to be working.

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China’s Electric and Hybrid Vehicles Production Up 280%

The Chinese government wants more people driving electric and hybrid vehicles, & has implemented policies to tweak demand. They appear to be working.

BYD plug-in electric car

BYD plug-in electric car: e6

Chinese government’s efforts to promote electric and hybrid vehicles is started to pay off as production of these vehicles saw a huge surge during the first seven months of this year.

According to recently released data by the Chinese Ministry of Industry and Information Technology, production of electric and hybrid vehicles rose 280% during January through July 2014 over the same period last year. A total of 25,946 electric and hybrid vehicles were produced during this period.

Production of pure electric passenger vehicles surged 700% to reach 13,829, while production of plug-in hybrid passenger vehicles grew 10 times to just over 5,000 units. Production of electric and hybrid commercial vehicles also registered a significant rise, with output growing by 46% and 60% respectively.

The increased supply is in direct response to the government’s efforts to increase demand for such vehicles. Last month, the central government announced that electric and hybrid vehicles will be exempted from 10% purchase tax between 1 September 2014 to 31 December 2017.

The government also set a minimum share of electric and hybrid vehicles in the fleets of public institutions and government bodies. 15% of all new vehicle procurement by government bodies in Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta should use electric or hybrid technology. The minimum share of electric and hybrid vehicles in newly purchased vehicles would increase to 30% by 2016.

The central government will also provide subsidies to clean vehicles priced at less than 180,000 yuan ($29,000 U.S.). The central government has also directed authorities that ratio of charging points for clean vehicles should be at least 1:1.

While electric and hybrid cars represented just 0.2% of the 11.7 million cars purchased during the first half of this year, the demand may increase significantly once the exemption from purchase tax kicks in.

Image credit: Dennis Cheng | CC BY-SA 2.0

 
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Written By

Mridul currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.

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