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March 14, 2017

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China may reduce quotas on e-cars

CHINA is considering easing proposed quotas aimed at producing more electric vehicles, as Beijing gets pushback from the automotive industry over the scale and pace of the plans.

If adopted, proposed changes under discussion could see a target of new-energy vehicles making up 8 percent of sales next year pushed to 2019, two auto executives said.

The changes would lower targets from a draft policy released in September requiring 8 percent of automakers’ sales to be battery electric or plug-in hybrid vehicles by 2018, rising to 10 percent in 2019 and 12 percent in 2020.

Any easing of NEV targets would be a pullback by Beijing, which has faced opposition to the planned targets as it looks to drive its domestic carmakers to overtake global rivals in the green vehicle sector.

Automakers and industry bodies have said the targets are too tough and could hurt manufacturers’ interests. New-energy vehicles last year took up just 1.8 percent of sales in the world’s biggest auto market, according to calculations based on official data.

“It’s normal to make revisions as it’s a draft plan,” said An Jin, chairman of Anhui Jianghuai Automobile Group (JAC Motor).

He said he was aware of talks to revise the quota targets, but said nothing was set in stone. “JAC hasn’t been told what revisions might be made to the draft, but I think it is possible the draft will be changed after the discussions,” he said.

“Whether the whole market can hit this quota by 2018 depends a lot on the strength of government policy. If it’s strong then we should be able to surpass the targets,” An said. But “if you consider China’s infrastructure and the transformation of China’s auto sector, then perhaps the pace will have to slow.”

Two executives familiar with the plans said the government was considering options for lowering the requirements.

One idea was to cut the quota need by 2 percent each year, cutting the 2018 requirement to 6 percent, said a China-based government relations official at a major global automaker. It would then be 8 percent in 2019 and 10 percent in 2020.

Another option would be to push back each target by a year, with the 8 percent quota starting from 2019, an executive at a Japanese car maker said.

Both asked not to be named due to the sensitivity of the matter and because the draft was still under consideration.

The overall policy includes quotas for plug-in cars, targets for average fuel economy requirements, and a credit trading system to push green-energy cars while penalizing petrol cars.


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