BEIJING – China is considering banning the production and sale of fossil fuel vehicles in the near future, Chinese Vice Minister of Industry and Information Technology Xin Guobin said on Monday.
Xin’s announcement came after a few frenetic months of strategic alliances in the sector, a process that may result in China becoming the global leader in the electric cars sector.
In order to curb the serious pollution in large Chinese cities and boost technology in the country, Beijing has long been promoting the development and sale of hybrid and electric cars, with 507,000 units sold in China in 2016.
Xin’s ministry presented a document for public discussion in June 2017, indicating its intention to establish sales quotas from 2018 onward for hybrid and electric vehicles, which are called New Energy Vehicles in China.
Despite the lack of a concrete decision and the possibility of the dates being postponed, the document suggested that hybrid and electric cars would reach eight percent of total sales in 2018, 10 percent in 2019 and 12 percent in 2020, year in which two million such vehicles are projected to be sold in the country.
Given that more than 24 million cars and another two million industrial vehicles were sold in China in 2016, these targets seem highly ambitious even if they are delayed.
Several manufacturers contacted by EFE refused to comment on these government plans, given that they have not yet been approved, but said that they were hoping that Beijing would approve a predictable legal framework.
However, the principal manufacturers present in the Chinese market have long been preparing themselves for this enormous transformation that will completely renovate the sector.
Volkswagen started the trend at the end of 2016 by signing a deal with China’s JAC Motors and in the last two months, Daimler-Benz, Ford along with Renault-Nissan have announced similar partnerships with other Chinese manufacturers.
In July, Daimler-Benz announced an agreement with BAIC to manufacture NEVs and, within the framework of the agreement, bought a part of the capital of Beijing Electric Vehicle, a BAIC subsidiary.
In August, Ford said that it was working jointly with electric car manufacturer Zotye, although so far there has been no formal agreement.
Renault-Nissan also signed an agreement shortly after with Dongfeng, which has a 14 percent stake in the French PSA Group, to manufacture an SUV.
Daimler-Benz intends to launch cars with the star of Mercedes-Benz on their hoods, but the other agreements are oriented towards the creation of new joint ventures, though with the novelty that the vehicles would exclusively be electric.
Volkswagen China Spokesperson Christoph Ludewig said that the company’s objective was not just to have a token presence, but to have a competitive position in a massive market.
He also added that in the next two to three years, the group was also planning to launch a total of 15 NEVs from its brands Volkswagen, Audi and Skoda, which are to be both manufactured in China and imported.
Tesla and General Motors have also expressed interest in producing electric cars in the country, with the former having made a preliminary agreement to set up a factory in Shanghai.
China’s largest domestic manufacturer of NEVs is BYD, a private company (in a sector that continues to be dominated by public enterprises) which sold 46,855 cars of this type in the first half of the year.
BYD announced last week its plan to launch small-sized electric cars to replace the electric quadricycles present all over China.
Beijing’s plan to ban cars running on fossil fuels boosted the shares of NEV manufacturers on Monday, with BYD rising 4.07 percent in the Shanghai stock exchange after soaring to seven percent at the beginning of the day.