China sets 2019 deadline for green car sales quotas

Manufacturers must meet minimum new-energy vehicle targets or risk fines

China issued a new regulation that mandates most carmakers to sell a minimum number of new-energy vehicles every year from 2019, a key step in official efforts to phase out fossil-fuel vehicles from the world’s biggest car market.

Under the so-called cap-and-trade policy, carmakers would be required to obtain a new-energy vehicle credit score of at least 10 per cent in 2019, and 12 per cent in 2020, the Ministry of Industry and Information Technology said. The rules apply to carmakers that produce, or import, more than 30,000 “traditional” vehicles annually. The ministry said manufacturers must buy credits or would face fines if they did not comply.

China, which has vowed to cap its carbon emission by 2030 and curb worsening air pollution, joins Britain and France in seeking a timetable for the elimination of vehicles using petrol and diesel.

The country needs to use alternative energy to power some 200 million vehicles that ply its roads and cut dependence on oil imports. China’s government said earlier this month that it was working on a timetable to phase out fossil-fuel vehicles.

Beijing previously proposed to start implementing the policy next year, a target that carmakers saw as overly ambitious. The new rules would buy manufacturers more time to expand production of new-energy vehicles.

While global manufacturers from billionaire Elon Musk’s Tesla to Nissan Motor and General Motors are racing to grab a slice of the electric-vehicle market in China, local manufacturers have also found considerable success, thanks to generous government subsidies.

Warren Buffett-backed BYD topped new-energy vehicle makers in sales in the first seven months of this year, delivering 46,855 electric and plug-in hybrid vehicles, resulting in about 30,000 credit points in the first half, according to the company’s calculation.

Beijing Electric Vehicle, the EV division of state-owned BAIC Motor, followed with 36,084 units. By comparison, GM has sold 738 cars that run on electricity since it launched the Velite 5 plug-in hybrid model at the Shanghai car show in April.

As part of efforts to boost sales of electric vehicles, foreign carmakers are setting up new joint ventures in China. Ford Motor is exploring setting up a joint venture to produce electric vehicles in China with Anhui Zotye Automobile while Volkswagen has partnered with Anhui Jianghuai Automobile Group to make electric cars.