Connect with us

Hi, what are you looking for?

CleanTechnica

Cars

China Flexes Its Muscle — Go BEV or Go Home

We have seen a lot of announcements for many new electric cars from the big carmakers. Some say it is #dieselgate that opened their eyes. Others think Tesla and Musk are threatening their sales. Occam’s razor tells us to look at the easiest explanation first. China’s NEV mandate might be the easiest explanation.

We have seen a lot of announcements for many new electric cars from the big carmakers. Some say it is #dieselgate that opened their eyes. Others think Tesla and Musk are threatening their sales. Occam’s razor tells us to look at the easiest explanation first. China’s New Energy Vehicle (NEV) mandate might be the easiest explanation.

China did give the Californian ZEV system a long hard look, and decided it would work for them too. In fact, CleanTechnica spoke with a China-linked professor in California who worked on both plans and walked China through the details. China adjusted the policy for its specific situation. The Chinese system is based on a NEV credit system, analogues to the Californian Zero Emission Vehicle (ZEV) credit system.

China mandates that a carmaker has bought or earned NEV credits equal to 10% of its fossil fuel vehicle (FFV) sales in 2019 and 12% in 2020. For example, if a carmaker sells 100,000 FFV in 2020, it will need 12,000 credits. Credits are earned by selling NEVs. A NEV is worth up to 2 credits for a long-range PHEV and up to 6 credits for a long-range BEV. They expect an average of around 3 credits per NEV in 2019.

The percentages for the years after 2020 have yet to be decided. The expectation is that the percentages will increase fast, very fast. China has suggested that they hope to get to 100% of BEV sales in (or before) 2030.

A carmaker that sells many cars in China will need a lot of credits in the not so distant future. Foreign automakers tried to slow down the timeline, but didn’t have much effect. The Volkswagen Group sells about 4,000,000 vehicles in China and needs 400,000 NEV credits in 2019.

Buick - China - Inspire crossover concept

For GM, it is 1.5–3.5 million vehicles, depending on consolidation of their joint ventures in China. The other large western carmakers — Ford, Toyota, Nissan, Honda, and Hyundai/Kia — are all selling between 1 million and 2 million vehicles each. They have announced plans to launch many new electric or electrified models in the next few years. Most of these new models will be for their Chinese customers. (Europe will then get priority before US customers.)

The Chinese market is expected to see 25 million FFV and 2 million NEV sales in 2019. With an average of 3 credits per NEV, there will be 6 million NEV credits generated. Only 2.5 million credits will be needed for the sale of 25 million FFV. There will be enough credits for sale by the many dozens of Chinese NEV makers for the big western carmakers, at a nice price.

The next year, 2020, will be no problem either, but after that year, the number of credits needed will increase fast. For VW, GM, and the others, there is a simple choice: “Make NEVs or leave the Chinese market.”

If Occam’s razor is right, this is the clearest reason for why all of these new, very ambitious electrification plans are announced.

 
Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.
 
 

Advertisement
 
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Written By

Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. At the end of 2019 I succeeded, I replaced my Twingo diesel for a Zoe fully electric. And putting my money where my mouth is, I have bought Tesla shares. Intend to keep them until I can trade them for a Tesla car. I added some Fastned, because driving without charging is no fun.

Comments

You May Also Like

Cars

Plugin vehicles are all the rage in China, having scored 325,000 registrations in October, up 113% year over year (YoY). That’s an especially impressive...

Coal

ADVChina, a YouTube channel that focuses on the adventure lifestyle and exploring China, recently shared an in-depth look at one of China’s largest open-pit...

Autonomous Vehicles

In the U.S., November 11 is known for being a day set aside to honor veterans. Globally, this date also has significance in various...

Cars

Volkswagen EV sales in China are doing just fine, thank you very much.

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.