Regulator supporting green development

China’s top industry regulator will further support the development of new energy vehicles with a series of measures, as part of the national effort to achieve peak carbon emissions by 2030 and carbon neutrality in China. 2060.

Measures include formulating a roadmap for the green development of the automotive industry and clarifying supporting policies such as extending purchase tax exemptions for NEVs until the end of 2022. , the Ministry of Industry and Information Technology said at an annual meeting last week.

The purchase tax is 10% of the selling price of the vehicle.
In addition to the tax exemption, China has provided business subsidies since 2009, with the amount of the subsidy depending on the models’ performance in terms of mileage on a single charge.

The Chinese government has distributed nearly 150 billion yuan ($23.67 billion) in subsidies to NEVs since 2009. Preferential policy support has prompted domestic and international NEV manufacturers to accelerate NEV production, establishing a competitive ecosystem in the largest automotive market in the world.

The government has slowly reduced its NEV subsidies to allow producers to fend for themselves. The grant will end in 2022.
Automakers such as Tesla, Xpeng and Chery hiked the price of their cars in China after subsidies were cut.

Cui Dongshu, general secretary of the China Passenger Car Association, said China’s NEV market is shifting from policy orientation to market orientation, but it’s a gradual process.

Without the NEV subsidy in 2023, the extension of the purchase tax exemption will play an important role in maintaining the enthusiasm of consumers buying NEVs.

A CPCA report showed that subsidy cuts and higher NEV car prices only marginally affected market sentiment.

Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, said the NEV subsidy is no longer the main driver of the market trend.

He said what will influence the trend of NEVs solely depends on customer demands and automakers’ ability to provide more competitive products.

Last year, China sold 3.52 million NEVs, a year-on-year growth of 157.5 percent, making the country the world’s largest NEV market for the seventh consecutive year.

NEVs accounted for 13.4% of the market share in China last year, up 8 percentage points from 2020.

CAAM predicts that this year, NEV sales will reach 5 million units, with a growth rate of 42% year-on-year.

MIIT said it would accelerate the construction of charging infrastructure in old residential areas and on highways.

China introduced 936,000 charging stations and 14,000 charging stations, up 193% and 90% year-on-year, respectively. And more than 10,000 power battery recycling service points have been set up.

Innovation capacity in the NEV market has improved significantly, especially in on-board lidars and artificial intelligence chips, MIIT said last week.

The ministry said it will continue to help accelerate innovation and industrialization breakthroughs in key technologies, including electric batteries, operating systems and chips, as part of efforts to further strengthen the stability and competitiveness of the industrial chain.

MIIT will also give importance to battery recycling systems and NEV safety regulations to improve the proportion of batteries recycled and their utilization efficiency, and promote the healthy and sustainable development of the industry.

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