China electric-car rules to start in 2019; aggressive totals are world’s highestChina electric-car rules to start in 2019; aggressive totals are world’s highest

You may not have heard it happen, but the global automotive industry changed forever on Thursday.
China released its plan to require substantial sales of plug-in electric cars by all makers who want to sell in the world’s largest car market, and they start in little more than a year.
The levels far exceed those required by California, whose zero-emission vehicle rules have just started to ramp up for 2018 after staying steady for six years.
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“It is no exaggeration to call this a landmark event in the history of the automobile,” said Michael Dunne, who’s covered that country’s auto industry for 20 years.
China’s electric-car production quotas, as detailed in China Daily and covered by Bloomberg among others on Thursday, apply to any maker selling more than 30,000 units a year in China—which last year bought 28 million vehicles.
Credits for so-called new-energy vehicles, both plug-in hybrids and battery-electric cars, must make up 10 percent of sales by 2019, one year later than originally planned.
BYD e6 electric taxi in service in Shenzhen, China
The quotas for new-energy vehicles are part of a larger package of rules on vehicle emissions, which include a cap-and-trade system under which manufacturers can bank credits for past and future sales of electric cars.
Carmakers can also buy and sell credits to meet the required quotas, which gives them more flexibility, a feature also found in California’s zero-emission vehicle requirements.
Starting the program in 2019 rather than 2018 gave foreign automakers a little more time to comply than an initial draft had suggested.
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Volkswagen, which has a large footprint in the market and sells more vehicles in China than in Europe, has said it will offer 30 electric models by 2025, but the first of those won’t hit the market until 2020.
“China is granting automakers a minor break on the timing to get up to speed,” Dunne acknowledged, “But these aggressive quotas will put China firmly in the driver’s seat for electric cars globally.”
“China is sending a clear signal to large automakers that had been dragging their feet on EVs,” said Bloomberg New Energy Finance analyst Colin McKerracher, “that it’s time to get on board.”
Volkswagen ID Crozz concept, 2017 Shanghai auto show [photo: Ronan Glon]
Environmental groups reacted to the news with jubilation, often noting the pervasive and hazardous air pollution in China’s populated areas and the country’s aggressive move toward lower-carbon and renewable energy.
Simon Mui of the Natural Resources Defense Council noted in a blog post that the quotas could require production of more than 1 million electric cars in China by 2020—a number that exceeds total global production today.
That number also dwarfs the combined total number of zero-emission vehicles required in California and the 12 other states that have adopted its zero-emission vehicle rules.
Indeed, China’s new rules—which so far extend only through 2021 but are expected to rise thereafter—were modeled after California’s.
Officials and regulators from the world’s most populous country and the most populous state in the U.S. have conferred over the past year on California’s experience with its ZEV mandate.
The rules from Beijing establish a system of points allocated to all-electric cars, hydrogen fuel-cell vehicles, and plug-in hybrids. Total points earned must add up to 10 percent of each automaker’s sales, translating to roughly half that percentage in actual units.
2014 Tesla Model S in China
After a slow start, roughly 1 percent of China’s auto sales last year were electric cars, and that proportion has reached 2 percent over the first six months of this year—twice the U.S. figure.
The rules will require plug-in cars to reach 4 to 5 percent of total sales by 2020, which an analyst from Bloomberg New Energy Finance suggested was reasonable.
Both nationally and locally, China has rolled out an array of incentives for electric-car purchase.
Those range from discounts and tax breaks to much faster registration of new cars under quotas that restrict the number of new vehicles allowed in the country’s largest cities, including Beijing and Shanghai.
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