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China eyes petrol car ban, boosting electric vehicles

Wednesday, September 13, 2017

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SHANGHAI, China (AFP) — China is gearing up to ban petrol and diesel cars, a move that would boost electric vehicles and shake up the world's biggest car market in a country that is plagued by pollution.

The plan would follow decisions by France and Britain to outlaw the sale of such cars and vans from 2040 to clamp down on harmful emissions.

The Government did not give a date for the ban, but the announcement drove up the shares of automakers and lithium battery makers in Asia, with Chinese electric car leader BYD closing 4.07 per cent up in Shenzhen and Toyota up 1.22 per cent in Tokyo.

Xin Guobin, vice-minister of industry and information technology, told a weekend forum in the northern city of Tianjin that his ministry has started “relevant research” and is working on a timetable for China.

“These measures will promote profound changes in the environment and give momentum to China's auto industry development,” Xin said in remarks broadcast by CCTV state television.

“Enterprises should strive to improve the level of energy saving for traditional cars, and vigorously develop new-energy vehicles (NEV) according to assessment requirements,” he said.

LONG ROAD AHEAD

While Xin did not give a deadline, the head of the National Passenger Car Association, a Chinese auto industry group, said it would be “a long process”.

“It will be hard to stop producing traditional fuel-powered vehicles for the next decade or two decades,” the association's secretary general, Cui Dongshu, told AFP.

“We may make significant headway in passenger cars in 2040 or even earlier but for other products like the heavy-duty trucks, it would be difficult.”

Automakers “have not really tried hard in this sector” and consumers are not so familiar with new-energy vehicles, Cui said.

But Bill Russo, managing director of Gao Feng Advisory group, said the move bodes well for Chinese automakers who are already able to compete with foreign car companies when it comes to making electric vehicles.

He added: “If China says no more ICE (internal combustion engines), the rest of the world will follow because the rest of the world can't lose China's market; it's too big.”

China produced and sold more than 28 million vehicles last year, according to the International Organization of Motor Vehicle Manufacturers.

The sale of new-energy vehicles topped 500,000 in the world's second-largest economy in 2016 — over 50 per cent more than the previous year, according to national industry figures. The majority were made by Chinese firms.

The Government introduced draft regulations this June compelling automakers to produce more electrically powered vehicles by 2020 through a complex quota system.

Xin said the policy would be implemented “in the near future”, according to the official Xinhua news agency.

RACE FOR GREEN CARS

As the measure looms, foreign automakers have announced plans to boost the production of electric cars in China.

Market leader Volkswagen sold a few hundred “green” cars among the four million vehicles it sold in China in 2016, but the German manufacturer plans to sell around 400,000 new-energy vehicles in the country by 2020, and 1.5 million by 2025.

Christoph Ludewig, VW's communications director in China, declined to comment on Xin's announcement, but he noted that the company has a joint venture with JAC that will produce such cars by next year.

“Our efforts are quite huge, so we want to contribute to and be on the forefront of the electrification of the Chinese automotive industry – that's clear,” Ludewig told AFP.

He also said VW would “work hard” to comply with the NEV quota once China implements it next year.

Volvo will introduce its first 100-per cent electric car in China in 2019.

Ford envisages that 70 per cent of all Ford cars available in China will have electric options by 2025. It is establishing a joint venture with China's Zotye Automobile to make and sell all-electric vehicles.

“We are already aggressively pursuing an electrification strategy to provide a comprehensive range of electrified vehicles in the country by 2025, including hybrids, plug-in hybrids, and fully battery-powered electric vehicles,” said Anderson Chan, a Ford spokesman in China.

French carmaker Renault, which started producing cars in China last year, will roll out two new-energy vehicles in the country — a sedan and small SUV — in 2018 and 2019, said Florence de Golfiem, its communications vice-president for China.

“We already have a very advanced technology,” she told AFP.

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