Home » Business » Autotalk Special
Motorists given new carrot to think green when buying
By Shao Shijie |
00:00 UTC+8 March 22, 2012
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Print Edition
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CHINA has unveiled further incentives for eco-friendly motoring by halving the tax on energy-saving vehicles and eliminating tax on ones that run on alternative energy sources.
It's a part of China's strategy to become a world leader in clean cars in the next 10 years. To that end, the government has reportedly pledged 100 billion yuan (US$15 billion) in investment, mostly aimed at domestic vehicle manufacture.
"The move is a further demonstration of government support for new energy vehicles," said Bai Xiaolin, analyst from Guotai Jun'an Securities Co. "China's domestic carmakers will benefit because a major portion of fuel-efficient vehicles are cars with small engine replacements, a mainstay of domestic players."
Guotai Jun'an estimates the tax incentives will favor companies such as Great Wall Motor, JAC Motor, BYD Co, FAW Car and Chang'an Automobile Group and parts makers like Wanxiang Qianchao.
It's not the first time that China has tried to nudge green technology along with government incentives. China late last year adjusted the Vehicle and Vessel Tax Law to levy moderately higher taxes on passenger vehicles with engine sizes of between 2 and 2.5 liters, and much higher taxes on those with an engine sizes above 2.5 liters.
Other efforts to encourage a lower-carbon society and promote fuel-efficient models have included offers of free license plates for green cars and eased traffic restrictions in some major cities.
"New energy vehicles" are defined as pure electric cars, plug-in hybrids and fuel-cell vehicles, both passenger and commercial, according to the industry and technology minister. The country is banking that the policy changes and financial incentives will help popularize green vehicles, whose sales have been restrained by high sticker prices and weak refueling infrastructure.
China is aiming to have 500,000 new energy vehicles on the roads by 2015, according to an industrial guideline issued by the State Council, China's Cabinet, at the end of last year. The target has been significantly adjusted from a more aggressive preliminary plan to have 1 million electric-powered vehicles running on the streets by 2015.
Development of new energy vehicles is a priority policy in the 12th Five-Year Plan, now in effect, according to Su Bo, deputy administrator at the industry and technology ministry.
The sector does indeed appear to have a promising future, with international auto companies eager to capitalize on the trend. Daimler AG, Nissan Motor, General Motors and other global auto giants have all committed to making and selling electric cars in partnership with their local partners in China.
General Motors last year introduced its Chevrolet Volt extended-range plug-in electric car to Chinese mainland.
Volkswagen will also start making electric vehicles in China through its two joint ventures as early as 2013. It is aiming for accumulated sales of 10,000 units by 2018.
It's a part of China's strategy to become a world leader in clean cars in the next 10 years. To that end, the government has reportedly pledged 100 billion yuan (US$15 billion) in investment, mostly aimed at domestic vehicle manufacture.
"The move is a further demonstration of government support for new energy vehicles," said Bai Xiaolin, analyst from Guotai Jun'an Securities Co. "China's domestic carmakers will benefit because a major portion of fuel-efficient vehicles are cars with small engine replacements, a mainstay of domestic players."
Guotai Jun'an estimates the tax incentives will favor companies such as Great Wall Motor, JAC Motor, BYD Co, FAW Car and Chang'an Automobile Group and parts makers like Wanxiang Qianchao.
It's not the first time that China has tried to nudge green technology along with government incentives. China late last year adjusted the Vehicle and Vessel Tax Law to levy moderately higher taxes on passenger vehicles with engine sizes of between 2 and 2.5 liters, and much higher taxes on those with an engine sizes above 2.5 liters.
Other efforts to encourage a lower-carbon society and promote fuel-efficient models have included offers of free license plates for green cars and eased traffic restrictions in some major cities.
"New energy vehicles" are defined as pure electric cars, plug-in hybrids and fuel-cell vehicles, both passenger and commercial, according to the industry and technology minister. The country is banking that the policy changes and financial incentives will help popularize green vehicles, whose sales have been restrained by high sticker prices and weak refueling infrastructure.
China is aiming to have 500,000 new energy vehicles on the roads by 2015, according to an industrial guideline issued by the State Council, China's Cabinet, at the end of last year. The target has been significantly adjusted from a more aggressive preliminary plan to have 1 million electric-powered vehicles running on the streets by 2015.
Development of new energy vehicles is a priority policy in the 12th Five-Year Plan, now in effect, according to Su Bo, deputy administrator at the industry and technology ministry.
The sector does indeed appear to have a promising future, with international auto companies eager to capitalize on the trend. Daimler AG, Nissan Motor, General Motors and other global auto giants have all committed to making and selling electric cars in partnership with their local partners in China.
General Motors last year introduced its Chevrolet Volt extended-range plug-in electric car to Chinese mainland.
Volkswagen will also start making electric vehicles in China through its two joint ventures as early as 2013. It is aiming for accumulated sales of 10,000 units by 2018.
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