China Is Considering Banning New Fossil Fuel Powered Cars

With the global vehicle industry heading towards intelligent and electric vehicles, work has begun on a timetable to ban the manufacture and sale of traditional energy cars, according to Guobin Xin, Vice Minister of Industry and Information Technology. Xin told a forum in Tianjin that vehicle companies should have a thorough understanding of the situation and readjust their strategies, adding that the Ministry of Industry and Information Technology (MIIT) will work out the timetable.

China’s vehicle industry contributed at least one tenth of total retail sales of consumer goods. The country produced and sold more than 28 million vehicles in 2016, making it the world’s largest vehicle producer and manufacturer for the eighth year running. China is also the largest producer and market for new energy vehicles, with more than 500,000 of them built and sold last year. There are more than one million new energy vehicles on the road in China, or half of the world’s total.

To encourage development of new energy vehicles, subsidies of as much as half of the original price are available, but in the long term, such subsidies may lead to blind expansion by manufacturers, said Qiuling Song from the Ministry of Finance at the forum. Subsidies will gradually be reduced and a new energy credit policy introduced, according to Song.

On 13 June, the MIIT released a policy document for public opinion on fuel consumption control and new energy vehicle credits. It requires car companies to meet a new energy credit ratio of eight per cent in 2018, 10 per cent in 2019, and 12 per cent in 2020, to ease pressure on energy and environment. Xin confirmed that the policy would be put into effect in the near future.

According to Xin, the period of time up to 2025 will be critical for the vehicle industry. Energy-saving and emission reduction requirements are increasing, the development of new energy vehicles is becoming more technically demanding and intelligent vehicles are expected to have a profound effect on the industry.