No more fossil-fuel cars

By Wang Cong Source:Global Times Published: 2017/9/13 22:11:23

China to phase out traditional autos, seek NEV dominance

Cars wait to get gasoline at a station in Taiyuan, capital of North China's Shanxi Province. Photo: VCG


China has laid bare its intention to remain at the top of the flourishing new-energy vehicle (NEV) segment with recent announcements of drastic regulatory changes aimed at boosting what the country considers to be a strategic industry.

This week, a top official with the Ministry of Industry and Information Technology (MIIT) announced that China is studying a timetable for phasing out fossil-fuel vehicles, and a mechanism for curbing carmakers' energy consumption and boosting NEV production and sales is coming soon.

"In hopes of seizing the commanding heights of the industry, some countries have already set a timetable for ending the production and sale of traditional fuel cars," MIIT Vice Minister Xin Guobin told the International Forum (TEDA) on China Automotive Industry Development held on September 9 in North China's Tianjin.

"The MIIT has also launched relevant studies and will, along with relevant departments, set our country's timetable," Xin said. "These measures will certainly promote profound changes in the environment and power of the development of our country's automobile industry."  

Mei Songlin, vice president and managing director at J.D. Power China, said that the announcement, though lacking details, offered a clear direction for automakers as to where the world's largest car market is heading, meaning they will put their resources behind the NEV drive.

"Now I'm sure everybody is keeping a very close eye on the timetable," Mei told the Global Times on Monday, noting that, given China's laser-like focus on the NEV industry, the timetable could come as soon as next year.

Wei Jianjun, chairman of Great Wall Motor Co, reportedly said on the sidelines of the Frankfurt Motor Show on Tuesday that China could end sales of traditional fuel cars by 2040.

Mei noted that China is already behind some countries in Europe in setting a timetable to phase out fossil-fuel cars. Norway, Germany and the Netherlands have already set timetables for phasing out fossil-fuel vehicles.

Xin at the same forum, where NEV development was the most popular topic, also indicated that a previously released mechanism to encourage carmakers to reduce fossil-fuel cars and increase NEV output could come soon.

"We have drafted a 'double points' mechanism along with relevant departments and will implement it in the near future," Xin said, noting that all firms should strictly follow the requirements to improve energy conservation and "vigorously develop NEVs."

The MIIT earlier circulated a draft of the mechanism known as the "double points" system, under which carmakers must meet energy consumption limits and produce a minimum number of NEVs.

Xin's remark contradicted earlier media reports that the implementation of the mechanism has been pushed back for about one year due to objections from carmakers.

The mechanism worried some carmakers that rely heavily on fossil-fuel cars, many of which were scrambling to form NEV ventures that some experts said would be able to trade points to avoid potential penalties.

Mei said that the "double points" mechanism would complement the timetable for phasing out fossil-fuel cars. "The timetable is for the long term, while the 'double points' mechanism could gradually guide carmakers in that direction," he said.

However, experts said these moves could potentially, at least in the short term, hurt Chinese carmakers, which had gained some advantage in certain areas but still have far to go to catch up with foreign industry leaders.

"Indeed, China's NEV companies have accumulated some technologies and experience, but they don't have an absolute advantage, so others could catch up and surpass them, if they don't move forward," Mei said.

The Chinese NEV industry has grown exponentially in recent years, with sales and output both surpassing 500,000 units in 2016, making the country the largest NEV producer and consumer, according to Xin.

Xin noted that China's research and development picture for NEVs has improved continuously and some domestic brands have gained a global reputation.

But problems persist such as uncoordinated development in the sector, lagging innovation ability and difficulties in cutting emissions.


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