China to curb output of oil-fuelled vehicles, boost EVs

The Chinese government is considering new regulations that would curb production of gasoline- and diesel-fuelled vehicles and boost output of new energy vehicles (NEVs) in the next few years.

The government will not approve any new factories that produce only oil-fuelled vehicles, according to new investment guidelines for the automotive industry being drafted by top economic planning body the NDRC.

Under the guidelines, automobile manufacturers will not be allowed to raise production capacity of oil-fuelled vehicles unless their actual output of NEVs — including electric and plug-in hybrids — has been above the industry average over the last two years.

The minimum output capacity of any new project that produces all-electric passenger cars must be at least 100,000 units a year, with the minimum capacity for all-electric commercial vehicles set at 5,000 units a year.

NDRC has opened the plan to public comment. It is unclear when the new rules will take effect.

The NDRC's guidelines are the latest move by the Chinese government to encourage NEV production. Beijing last year introduced a credit-score programme to incentivise manufacturers to focus on electric vehicles. Domestic carmakers are obliged to obtain an NEV credit of 10pc in 2019, rising to 12pc in 2020.

Local governments have also been promoting the use of new energy vehicles. Hainan province requires all new official cars to be NEVs, and plans to install at least one charging pile every 50km on expressways.

Shenzhen city in Guangdong province is on target to entirely switch to electric taxis from 1 January 2019. Shenzhen will install 18,000 new charging poles this year to further promote the use of electric vehicles, bringing the total to 40,000.

China has installed at least 662,000 charging piles across the country, including 275,000 public and 387,000 private piles.

China's sales and production of electric vehicles rose sharply again in July , increasing by 48pc and 54pc from a year earlier to 84,000 and 90,000, respectively.

The country is on target to produce 1mn NEVs in 2018, up by 25pc from 795,000 units last year. Beijing is also aiming to double production of electric vehicles by 2020 to save energy and curb pollution. China produced only 8,200 electric vehicles in 2011.

The fast growth of NEV production is expected to raise demand for metals used in batteries, such as cobalt, nickel and lithium. China is likely to produce 12.1bn lithium-ion batteries in 2018, up by almost 23pc from last year, with rising EV production the biggest driver of the increase.

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