China announces NEV development plan

China's state council has outlined a development plan for the country's new energy vehicle industry, aiming to accelerate technological innovation and infrastructure construction.

This comes after Beijing announced new development plans for strategic industries, including electric vehicles (EVs), new energy resources and technology infrastructure, in response to the impact of the Covid-19 economic downturn and trade tensions with the US.

The latest plan seeks to ensure a more orderly development of China's NEV sector, promote the establishment of a unified national market and boost industry integration and market competitiveness.

Infrastructure strategy

The government will encourage manufacturers to innovate and make technological breakthroughs in NEV operating systems and power batteries. Efforts to further integrate the new energy vehicle industry with the energy, transportation, information and communication sectors will also be supported.

Beijing announced at the end of September that it would reward innovations in the fuel cell electric vehicle (FCEV) industry, in an effort to make breakthroughs in key technologies and build a complete industry chain in four years.

The government wants to also speed up efforts to upgrade infrastructure, such as building more charging points and hydrogen refuelling stations. It will accelerate the formation of public networks to provide fast-charging services to NEV drivers near expressways and in urban and rural areas.

Several major cities in China have taken the lead in developing NEV infrastructure. Shanghai plans to add 100,000-200,000 of public and private NEV charging points over the next three years.

China's industry and information technology ministry announced a campaign in mid-July to promote the use of NEVs in rural areas. It added more NEV models to its campaign earlier this month, with more commercial vehicles to meet various needs.

International cooperation

The plan also aims to promote closer cooperation between Chinese NEV firms and international partners.

European carmaker Volkswagen invested in China's major battery manufacturer Gotion (Guoxuan) Hi-Tech and domestic automobile manufacturer Anhui Jianghuai Automobile in May.

US EV manufacturer Tesla is the only wholly owned foreign automaker in China, with its factory in Shanghai expected to meet a production target of 1mn units/yr in the longer term from current capacity of 200,000 units/yr.

Policy support

The Chinese government will come up with more supportive policies to promote the use of NEVs in the public service sector, according to the latest plan. It is aiming for at least 80pc of such vehicles to be used in areas such as public transport, taxi services and logistics in the country's "ecological civilisation" pilot zones, as well as in key regions to prevent and control air pollution.

China at the end of June revised its NEV credit score programme for 2021-23 to reshuffle the country's automotive manufacturing industry by encouraging more auto producers to produce EVs and reduce output of vehicles that run on fossil fuels.

The country's NEV production totalled 602,000 during January-August, down by 26.2pc from a year earlier, according to data from the China association of automobile manufacturers. Sales dropped by 26.4pc to 596,000 over the same period, with higher output in recent months outweighed by the overall impact from the Covid-19 pandemic.