China to Eventually Ban Diesel and Petrol Vehicles, Boosts Electric Car Production

Christian Cutler September 11, 2017
China to Eventually Ban Diesel and Petrol Vehicles, Boosts Electric Car Production

China plans to ban the production and sale of cars that run on diesel and petrol, according to the country’s vice minister of industry in a forum over the weekend.

Vice minister Xin Guobin said that the ministry has started doing “relevant research” about the matter, and it will create a timeline with efforts coming from different departments. According to him, the policy would be implemented “in the near future.”

“Those measures will certainly bring profound changes for our car industry’s development,” he said. He also added that “turbulent times” are coming for the auto industry.

According to Liu Zhijia, who is an assistant general manager at Cherry Automobile Co, the implementation of the ban could be later than 2040, and it will then give “plenty of time” for everyone to prepare.

Xin asserted that enterprises and car makers should work hard to improve the levels of energy saving for traditional cars, and “vigorously develop new energy vehicles according to assessment requirements.”

China is considered as the world’s largest car market, and it has produced 28 million vehicles in total last year. This figure included commercial vehicles, and it represented roughly 30 percent of the total global vehicles count, which was 94 million last year. This data was released by the International Organization for Motor Vehicle Manufacturers.

This decision followed similar announcements from the United Kingdom and France. The two countries have expressed their intentions to halt the production and sales of diesel and petrol cars by 2040. The British government received criticisms from the car industry when the announcement was made, and the government eventually revised the decision, saying that hybrid vehicles will not be covered by the ban.

In Beijing, which is China’s capital, the decision is crucial for its targets: leading in the worldwide race to develop electric vehicles, and cleaning up polluted and congested cities. The UK and France have the same reasons for outlawing traditional cars.

Last June, the government introduced a draft regulation which is expected to compel car manufacturers to boost and increase the production of electric-powered vehicles. It will run through a complex quota system. Draft rules have been circulating but have not been transformed into laws yet. As a part of the efforts to bolster new energy vehicle production, other generous subsidies have also been passed.

As for the vehicles’ sales, BYD, which is backed by Warren Buffet, led the sales in the first seven months of the current year. According to the data released by China Passenger Car Association, BYD delivered over 46,000 electric and hybrid vehicles during that period. Meanwhile, state-owned BAIC Motor’s electric vehicle division delivered over 36,000 units. General motors, on the other hand, sold 738 electric-powered cars since the launch of its Velite 5 plug-in hybrid model last April.

In 2018, Honda Motor Co plans to bring its electric vehicle model in the Chinese market, according to Yasuhide Mizuno, the company’s chief operating officer in China. The Japanese automobile maker is working out Chinese joint ventures with Guangqi Honda Automobile Co and Dongfeng Honda Automobile Co, and will consequently create a new brand with them.

Nissan, which has just recently introduced to the world its new Leaf model, said that it will bring the electric car to China in 2018 or 2019.

William Li, an internet entrepreneur, will start selling ES8 through Nio. ES8 is a sport-utility vehicle powered by batteries, and is set to be on sale in mid December. Tesla said that it is currently doing efforts with the government of Shanghai to explore local manufacturing. This move, if it brings favorable results, will then allow the company to achieve economies of scale and reduce manufacturing, labor, and shipping costs.

“This will ask everyone, from energy and technology sectors as well as traditional automakers, to change to the lane to develop powertrains,” said Zhang Yang, a vice president at Nio. “It’s hard to say who can be the winners at the moment. All of us should stand the test of speed and endurance in this run.”


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Christian Cutler

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