China to remove quotas on licence plates for NEVs

After China has been cutting EV subsidies before abolishing them next year, Beijing is still pro new energy vehicles and is planning to do away with limits on number plates for newly registered NEVs.

Until now, the Chinese government not only had very strict limits on number plate quotas for combustion engines but some regions had also included new energy vehicles. Now, in an effort to keep boosting EV sales without subsidies, the National Development and Reform Commission (NDRC), China’s state planner, has issued a statement indicating that it will ask cities to remove such caps on license plates for vehicles with alternative drives.

Last year in Beijing alone, about three million people waited for a license plate and only 60,000 plates were issued for electric vehicles. The change in the law also provides new opportunities for foreign electric car manufacturers who were disadvantaged under both subsidy provisions – since they had no access to the regular incentives of the state – as well as being limited by number plate quotas for NEVs.

From next year, buyers of electric vehicles will no longer have access to large grants, but car manufacturers will, in turn, be obliged to produce more electric cars in order to resell their petrol vehicles in China. The increased production volume alone is expected to lead to lower prices for NEVs.

Chinese brands accounted for 96% of 711,000 EVs built and sold in China in 2018. Currently, Tesla, Nissan Leaf and Denza are the only three non-Chinese EV brands for sale today in the world’s largest electric vehicle market. However, major carmakers, such as Ford, Renault, Daimler, Audi, Volkswagen, Audi and Spanish VW subsidiary Seat are all poised for releasing electric models in China, not the least because they must.

China’s new regulations may also be aimed at improving the quality of Chinese EVs by opening the competitive environment. This was apparently also the purpose of new regulations on EV startups in China made announced last week.  This was addressing a number of problems, most likely also the fact that NEV customers in China were complaining of low-quality levels.

Tesla is already well positioned in China and should greatly benefit from the new regulations. The company just released Navigate on Autopilot for Chinese markets. While Tesla aims to complete its Gigafactory 3 in Shanghai this summer, Tesla has been putting considerable effort into marketing for the Chinese market. The Californian company has made a slightly cheaper version of the Model 3 for China, as well as opening pre-orders for locally-made Model 3, which will be manufactured in Gigafactory 3.

teslarati.com, forbes.com (EV sales in China last year)