China studying when to end sales of traditional fuel cars

Under draft rules released in September for public consultation companies will be required to obtain a minimum new-energy vehicle credit score next year derived from different weightings assigned to various types of zero and low-emission vehicles. Phot

"Those measures will certainly bring profound changes for our vehicle industry's development", he said at an auto industry event in Tianjin, according to a report from the Xinhua News Agency. Earlier Britain and France had also announced the plan to stop the sale of petrol and diesel run automobiles by 2040. However, the size of China's vehicle market gives any policy changes an outsize importance for the global industry.

With annual sales of some 24 million vehicles, China is home to one in every four new cars on the planet. Neither of those targets looks especially ambitious, given the rapid drop in battery costs: In the United States and European Union, electric cars will reach price parity with conventional vehicles in terms of purchase and running costs around the mid-2020s, according to BNEF. Chery recently unveiled battery-powered and hybrid vehicle models at a Frankfurt motor show.

What does it mean for China?

Additionally, UK has also given the same timeline which indicates that China is not going to be the only country to cease the sale of traditional fuel cars. To date, there are 140 electric vehicle battery manufacturers in China, and they have led the doubling of the global battery cell production capacity to 125 GWh to date. China already dominates the electric vehicle (EV) market, making more than 40% of EVs worldwide.

Chinese carmakers have bet big on the cleaner engines of the future, and account for 96 percent of electric vehicles sold in the country - compared to a market share of just 43 percent in the traditional auto sector.

While Mr Xin did not give a deadline, the head of the National Passenger Car Association, a Chinese auto industry group, said it would be "a long process". "This poses a real problem for the European industry", says Laurent Petizon of AlixPartners.

A manager for another Chinese vehicle manufacturer, Chery Automobile, speculated to Bloomberg that 2040 would be a reasonable target for the gas-car phaseout, given the size of China's market. The country accounted for nearly a third of the cars that were manufactured past year. But other countries that have plans to transition away from gas power have targets centered around 2030.

Honda will be creating a new brand with the two companies, China's chief operating officer Yasuhide Mizuno said at an auto forum. Transport makes up one-quarter of European Union greenhouse gas emissions, and its share is growing. They may be electric, but if they're powered from a coal- or fossil fuel-based grid, their environmental impact is still comparable to traditional cars.

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