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China Takes Step to Let Foreign Automakers Make Electrics by Themselves, With a Catch

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With 327.037 retail unites sold, GM set a sales record in China for October

Photo: Dennis Jarvis

When you talk about the future of electric vehicles, at some point the conversation needs to turn to China, particularly as the country has announced that it is working on a timetable to end sales of gas and diesel cars entirely, leaving only New Energy (so, mostly battery electric) vehicles.

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However, the newest news comes to us courtesy of Bloomberg, who spoke to “company officials briefed on the matter,” who said that the world’s biggest country was discussing plans to allow foreign carmakers to set up solely-owned electric vehicle businesses in the country’s free-trade zones, to possibly go into effect early next year.

To those saying, “so what?” to that, right now if you want to sell cars in China, you need to make a deal with a Chinese carmaker and split ownership 50/50. Understandably, foreign automakers would much rather not do that, and keep all of the profit for themselves.

This, by the way, would probably be just a first step, as the country back in April promised to ease the 50/50 rule “in an orderly manner.”

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However, this first step may have a catch to it, according to Michael Dunne, of Hong Kong-based Dunne Automotive: Chinese free-trade zones usually let foreign companies have 100% ownership and make stuff, but only for export. You still can’t sell that stuff in the country unless you are on the “white list,” which you get on by, you guessed it, sharing ownership with a Chinese company.

It’s a step in the right direction, just not necessarily a helpful one as of yet.

News Sources: Green Car Reports, Bloomberg