China may issue more EV permits to expand output
China’s government is considering a resumption of new permits to companies that want to produce electric vehicles as early as the first half of 2018, sources said.
The move would clear the way for Ford Motor Co., Tesla Inc. and some local Chinese manufacturers to start production.
The National Development and Reform Commission, which oversees new investments in the auto industry, halted China’s license program earlier this year to rein in capacity expansion.
Assembly plants under construction are slated to add the capacity to produce more than 2 million electric vehicles a year.
While Beijing remains concerned about the issue, the government is reconsidering its edict as it deals with a backlog of several dozen applicants, the sources said.
The central government has announced measures to allow foreigners to step up investment in the $11 trillion (72 trillion yuan) economy even as U.S. President Donald Trump wrapped up his visit to China without securing concrete concessions on the U.S. trade deficit.
Auto policy
China also said last week it will carry out a trial by June that would allow overseas carmakers to set up wholly owned electric-vehicle businesses in its free-trade zones.
That would be a significant first step toward overhauling China’s decades-old auto industry policy, which requires foreign automakers to form joint ventures with Chinese partners.
The NDRC did not immediately comment on its plans. The regulator is working on amending the current license program and wants to raise the threshold for new entrants, the sources added.
Since March 2016, China has handed out 15 EV licenses -- local manufacturer Wanxiang Group and a Volkswagen AG joint venture were among the recipients -- to foster competition for the predominantly state-owned auto industry.
The ensuing rush saw suppliers of consumer goods – such as televisions and air conditioners – drumming up plans to enter the auto industry.
But automakers are seeking the permits, too. Ford and Tesla are among foreign carmakers that are preparing their China EV strategy to meet the country’s stricter emissions rules. Ford’s new joint venture with Anhui Zotye Automobile Co. plans to apply for a permit for a factory that can churn out 100,000 electric passenger vehicles per year.
Tesla is said to have reached a preliminary agreement with Shanghai’s municipal government to produce vehicles there, although CEO Elon Musk told investors this month that the company is still three years away from starting production in China.
The license program is a key tool for Beijing’s carrot-and-stick approach to expand the nation’s EV fleet. Starting in 2019, China will require most carmakers to produce electric vehicles, and those who fail to do so must buy credits from other automakers or pay a fine.
That state support helped China surpass the United States in 2015 to become the world’s biggest market for ‘pure’ electric vehicles and plug-in hybrids.
Last year, 507,000 such vehicles were sold in the country, according to the China Association of Automobile Manufacturers. China aims to boost annual sales of electric vehicles to 2 million units by 2020.
The National Development and Reform Commission, which oversees new investments in the auto industry, halted China’s license program earlier this year to rein in capacity expansion.
Assembly plants under construction are slated to add the capacity to produce more than 2 million electric vehicles a year.
While Beijing remains concerned about the issue, the government is reconsidering its edict as it deals with a backlog of several dozen applicants, the sources said.
The central government has announced measures to allow foreigners to step up investment in the $11 trillion (72 trillion yuan) economy even as U.S. President Donald Trump wrapped up his visit to China without securing concrete concessions on the U.S. trade deficit.
Auto policy
China also said last week it will carry out a trial by June that would allow overseas carmakers to set up wholly owned electric-vehicle businesses in its free-trade zones.
That would be a significant first step toward overhauling China’s decades-old auto industry policy, which requires foreign automakers to form joint ventures with Chinese partners.
The NDRC did not immediately comment on its plans. The regulator is working on amending the current license program and wants to raise the threshold for new entrants, the sources added.
Since March 2016, China has handed out 15 EV licenses -- local manufacturer Wanxiang Group and a Volkswagen AG joint venture were among the recipients -- to foster competition for the predominantly state-owned auto industry.
The ensuing rush saw suppliers of consumer goods – such as televisions and air conditioners – drumming up plans to enter the auto industry.
But automakers are seeking the permits, too. Ford and Tesla are among foreign carmakers that are preparing their China EV strategy to meet the country’s stricter emissions rules. Ford’s new joint venture with Anhui Zotye Automobile Co. plans to apply for a permit for a factory that can churn out 100,000 electric passenger vehicles per year.
Tesla is said to have reached a preliminary agreement with Shanghai’s municipal government to produce vehicles there, although CEO Elon Musk told investors this month that the company is still three years away from starting production in China.
The license program is a key tool for Beijing’s carrot-and-stick approach to expand the nation’s EV fleet. Starting in 2019, China will require most carmakers to produce electric vehicles, and those who fail to do so must buy credits from other automakers or pay a fine.
That state support helped China surpass the United States in 2015 to become the world’s biggest market for ‘pure’ electric vehicles and plug-in hybrids.
Last year, 507,000 such vehicles were sold in the country, according to the China Association of Automobile Manufacturers. China aims to boost annual sales of electric vehicles to 2 million units by 2020.
