China to increase NEV quota moderately from 2021

The Chinese government has submitted a draft for updating its quotas for New Energy Vehicles (NEV), which include electric cars and plug-in hybrids, beyond 2020.

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According to this, manufacturers must collect 14 per cent of their production volume of NEV points from 2021, 16 per cent from 2022 and 18 per cent from 2023. The NEV quotas for 2019 and 2020 are ten and twelve per cent, respectively. This is the approach taken in the catalogue of measures published by the Chinese Ministry of Industry and Information Technology (MIIT). This means that the regulations issued in 2017 will basically be continued.

The credit scheme works in per cent, but functions as a points system in which points are awarded according to a complex formula based on production levels and factors such as energy efficiency and range.

For the ministry, it continues to play an essential role in moving the car industry towards energy-saving technologies and the associated developments. According to MIIT, it has achieved its goals: Compared to 2016, average fuel consumption in China has fallen by 10 per cent to 5.8 liters/100km by 2018. In 2018 alone, 1,028 million new energy vehicles were sold in China. The growth continued in the first half of 2019, as the latest CAM evaluations show as well.

The MIIT intends to publish the new quotas, which are to apply from 2024, at an unspecified date.

Update 12.07.2019: For the first time, the Chinese government also provides for an improvement in the status of full hybrids in the catalogue of measures – so far only PHEV, FCEV or BEV have been supported. Although hybrids are still considered combustion engines, they are now classified as “passenger cars with low fuel consumption”. In future, they are to receive fewer negative points and thus be better placed than pure combustion engines. The incentive for manufacturers to also offer attractive hybrids is to be increased in this way. The government’s calculation: If you have a combustion engine, then please do it with electric support.

There is a potential downside: experts suspect that sales of electric cars could suffer as a result. If manufacturers have to make up fewer points thanks to hybrids, this makes the billions invested in electric cars less attractive.

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