China puts NEVs in fast lane with delegation of power

By Wen Sheng Source:Global Times Published: 2018/12/19 23:10:12

Illustration: Luo Xuan/GT

China's central government has delegated the authority to approve new-energy vehicle (NEV) projects to provincial governments, an apparent attempt to nurture an industry that has both huge market potential and the ability to slow global climate change.

The National Development and Reform Commission, the top government planner under the State Council, said in a statement recently that effective in January, provinces will be responsible for examining and approving new NEV plants within their borders.

The delegation of power means that many NEV factories will pop up throughout the country in the coming years.

After a period of fierce free market competition and consolidation, which China's government encourages, the goal is that five to 10 NEV manufacturers with strong technology and a significant market share will win the race.

BAIC BJEV, the BAIC group's electric car production arm, saw its sales in 2017 rise to about 103,200 vehicles, while BYD sold 113,669 NEVs in 2017.

China is at the forefront of the melding of new industries, thanks to rising external pressure on the country and its manufacturers to make advances in technology. China's distinctive yet efficient regulatory approach also gives its companies a freer hand in innovation related to new technologies and services - including high-speed railways, mobile payments, e-commerce and electric cars.

China will have advantages in industrial upgrading, such as its huge market and an efficient centrally driven economy model. Through NEVs, major economies can eliminate internal combustion vehicles. 

Even though some Western powers remain keen on producing coal and crude oil, the majority of economists and ecologists in the world believe the future of carbon-free transportation lies in NEVs.

As battery costs fall and economies turn away from internal combustion engine cars, the most aggressive outlooks see NEVs making up one-third of the global vehicle fleet by 2040 and one half by 2050.

Consider the issue of recharging. By 2020, experts forecast that an electric car will be able to run 800 kilometers on a single charge compared with 300 kilometers now.

China's drive to build up its NEV fleet is part of a broader effort to improve the nation's air quality and meet the demands of the Paris Climate Accord. The fleet of more than 4,000 public buses in the southern boom city of Shenzhen, adjacent to Hong Kong, have all been converted to NEVs. Nearly one-third of the buses running on Beijing streets no longer emit black smoke.

Experts have asked the government to issue policies to incentivize NEV research and development, and inspire mass production and consumption, including subsidies to NEV makers and bigger tax breaks for NEV buyers. 

To promote NEV sales, some economists have asked the government to impose a ban on the sale of internal combustion cars in 2035 or even earlier.

In 2015, China overtook the US as the world's largest NEV market. Now, China has more than 1.8 million NEVs in service, according to the China Association of Automobile Manufacturers. The industry organization estimated NEV sales would exceed 1.5 million units in 2019.

As Chinese market demand for electric cars soars, businesses are being urged to secure supplies of lithium, a key ingredient in batteries. Now, an array of lithium processing factories are being built in China.

The author is an editor with the Global Times.

Posted in: INSIDER'S EYE

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