Subsidies and New Policies Contribute to China’s Booming EV Sales
Last month, China announced its plan to phase out fossil-fueled vehicles so that by 2025, each manufacturer will have a 20% inventory of hybrids and EVs. Around the same time, it also stated that it will implement a strict New Energy Vehicle sales quota that automakers must meet by a 2019 deadline. Starting in 2018, each automaker must sell more than 30,000 vehicles each year and ensure that 12% of sales are from plug-in hybrid or electric vehicles.
This month, China’s prowess when it comes to incorporating EV technology is becoming clearer than ever. China has solid internal plans and legislation to help bring about this change. One of the key factors contributing to its accelerated progress towards EV goals is a new industrial policy dubbed “Made in China 2025.” The policy claims that by 2025, Beijing will procure national champion status in 10 different high-tech industries; one of these industries is EVs.
Subsidies have also put China on the fast-track to EV production and sales. According to rating agency, Fitch, China is second only to Norway in having the most generous vehicle subsidies around the globe. Last year’s subsidies amounted to up to $15,000 per vehicle.
EV sales have steadily been increasing both to the new Made in China 2025 policy as well as the generous subsidies that have given residents more incentive to opt for EVs over conventionally-fueled vehicles. 2016 witnessed a total of 507,000 EVs sold, a 53% increase from the previous year.
In addition, China currently has 171,000 EV charging stations within its borders, to accommodate the expanded number of EVs. The government is already investing significant resources to broaden this network even more in the next few years.
We anticipate further details about China’s successful, speedy progress towards its EV goals, as it inspires other countries to pursue similar eco-friendly ambitions.
Meet Your Match: Find the right tires for your vehicle
News Source: The Financial Times