Top stories of China NEV market in 2017

In the past year, the global auto industry has put great efforts in new energy vehicle segment. We made a summary about the top stories of new energy vehicle segment in China in the past year, for your reference.

NEV subsidies said to phase out in 2018

Even though relevant departments have decided in 2015 that NEV subsidy may phase out, it is still a surprise for many automakers when a draft of the phasing out plan was revealed.

The draft shows that it is much more difficult for NEVs to be qualified for the subsidy. The adjusted subsidy policy is likely to favor those vehicles with longer range and lower consumption, which will accelerate the elimination of low-end products and promote the development of the NEV technology.

Previously, the departments were said to reduce the subsidy by 20 percent before 2018, by 40 percent from 2019 to 2020, and be totally withdrawn in 2020.

Dual-credit Scheme to take effect

In September, relevant departments issued the dual-credit scheme, which will begin to take effect from April 1 this year. In 2019, new energy vehicle sales quota for automakers is set at 10 percent of their annual sales. For 2020, the new energy vehicle sales should account for at least 12 percent of automakers’ total sales volume.

Even though the scheme will be effective starting on April 1, the punishment for those which fail to meet the standard will actually begin from 2019.

Ever since the issue of the scheme, automakers at home and abroad have changed their attitude toward China’s new energy vehicle market, especially global automakers. In order to gain more market shares in the new energy vehicle market and meet the requirements, many new joint ventures came into being in the last year, such as Zotye Ford and JAC VW.

New startups in new energy vehicle market

In the past year, several new startups managed to launch their mass-produced models against all suspicions.

On December 16, ES8, NIO’s first mass-production vehicle, was officially launched in Beijing. At the launching ceremony, the Shanghai-based electric vehicle start-up unveiled the model’s price and presented many marvellous features and services, such as its swappable battery service system and NOMI artificial intelligence system.

Several days before ES8’s launching, another startup, WM released its auto brand and its first SUV model also made debut at the launching conference. The SUV will be officially launched at the 2018 Beijing Auto Show.

NEV joint venture boom

In June, Anhui Jianghuai Automobile Co., Ltd. (JAC) and Volkswagen AG signed a joint venture agreement in Berlin, in the presence of German Chancellor Angela Merkel and Chinese Premier Li Keqiang. The joint venture with JAC would be VW’s third joint venture in China, which was forbidden before as foreign automakers could only establish up to 2 joint ventures in China.

Just a month later, BAIC and Daimler signed new framework agreement. Both parties would invest RMB 5 billion in total and introduce Mercedes-Benz battery electric vehicles to China. Besides, they would also set up a battery electric vehicle manufacturing base and power battery factory.

In August, another two joint ventures between global automakers and local ones came into being. The first one is the joint venture between Ford and Zotye. Both parties hold 50 percent of the joint venture’s stake and they will offer battery electric vehicles under self-owned auto brands.

Renault-Nissan and Dongfeng entered joint venture agreement to build electric vehicles in China. The new joint venture, dubbed as eGT New Energy Automotive Co., will be owned 25 percent each by the two foreign automakers and 50 percent by Dongfeng.

China said to relax ownership limits on foreign joint ventures

Ever since the reforming and opening, it is stipulated that the foreign party should hold no more stake than the local one to protect China’s auto industry. But this situation may be changed in new energy vehicle industry.

Zheng Zeguang, Vice Foreign Minister, said that the pilot project to ease control on the stake of special vehicle and new energy vehicle joint ventures will begin before June, 2018 in the free trade zone.

China planning to ban fossil-fuel powered vehicles

Xin Guobin, the vice minister of industry and information technology(MIIT), said at the International Forum (TEDA) on Chinese Automotive Industry Development that his ministry is working with other regulators on a timetable to end production and sales of traditional fossil-fuel powered vehicles.

Even though this plan is not about new energy vehicle, it will boost the expansion of new energy vehicle market. In October, Changan announced its Shangri-La Plan. According to the plan, Changan will start to ban the sales of traditional fuel-powered vehicles in 2025 and invest RMB 100 billion in new energy vehicle segment.

In the last month of 2017, BAIC also said that it will ban the sales of self-own branded traditional vehicles first in Beijing city in 2020. In 2025, the automaker will finally stop the sales and production of those vehicles across China.