China's Ministry of Industry said it could temporarily lower quotas designed to increase production of electric cars, in a bid to help vehicle manufacturers in the world's largest market revive sales severely affected by the coronavirus pandemic. .
China has some of the strictest rules in the world regarding the production of fossil fuel vehicles as it combats the unhealthy levels of air pollution in its crowded cities.
Reuters reported that automakers in China are required to make new energy vehicles (NEVs), including fully electric vehicles, plug-in hybrids and hydrogen fuel cells, to earn "points" to offset a portion of the negative points in those incurred when producing internal combustion engine vehicles.
Depending on the current situation, the Ministry of Industry and Information Technology said in a policy that it could temporarily adjust quotas and allow automakers to use the green points they generate next year to offset their negative points this year.
Industry officials see it as a supportive move, as automakers can better manage vehicle production with less impact on policy.
Reuters reported exclusively on the policy discussion in April, citing people familiar with the matter.
Sources also told the news agency that China would delay the implementation of some emission rules by six months, which was later confirmed by the eastern country's state planner.
The temporary reduction in NEV fees is likely to allow companies to delay model launches, which have more expensive technology than conventional vehicles, and also discourage them from aggressive marketing.
At the same time, China has reclassified gasoline-electric hybrid vehicles to receive more favorable treatment than gasoline or diesel under the new clean car rules, making it easier for automakers to meet environmental quotas and offer more options.
Those rules have pushed domestic and international automakers, including Tesla and Volkswagen, to spend billions of dollars developing and producing new energy vehicles (NEVs), such as all-electric vehicles, plug-in hybrids, and fuel cells. hydrogen fuel.
Plug-in hybrid technology differs from gasoline-electric hybrid vehicles.
However, its point system for manufacturers has been criticized for offering little incentive for automakers to improve the efficiency of gasoline cars.
The policy published by China's Ministry of Industry and Information Technology allows automakers to gradually make more gasoline-electric hybrids and fewer of the more expensive fully electric vehicles from 2021 to 2023.
Such hybrids would still be considered to be powered by fossil fuels, but would be re-classified as "fuel efficient passenger cars.
Significantly, the number of negative points incurred for making gasoline electric hybrids will be less than for gasoline-only vehicles.
According to experts and industry officials, that could see more of those traditional motor vehicles being replaced by gasoline-electric hybrids, because when automakers produce those hybrids, they won't have as many negatives to make up for.
China expects NEVs to account for about a quarter of all vehicles sold in the country by 2025.