China to further regulate low-speed EV industry, curb new capacity

09 November 2018

China's top industry regulators, including the Ministry of Industry and Information Technology (MIIT) and National Development and Reform Commission (NDRC), issued a statement on 8 November relating to further regulation of the low-speed electric vehicle (EV) industry. According to the statement, provincial governments are required to carry out a thorough investigation of enterprises engaged in the manufacturing of low-speed EVs in their regions. New capacity related to production of such vehicles will not be approved. Applications for market entry of new models will not be approved under the new regulations.

Significance: In China, a low-speed EV is defined as a pure battery electric vehicle with a designed travelling speed of less than 70 kilometres per hour. Pushed by growing demand in rural areas and small townships and cities, the low-speed EV market flourished in the past five years. However, the industry has never been properly regulated due to lack of standards. Low-quality products also lead to surging numbers of road accidents. Such vehicles are also believed to inhibit the growth of the sub-compact EV segment. The Chinese regulators' determination to clamp down on the low-speed EV industry has also put an end to manufacturers which intended to bring unique products to the market. A typical case is CHJ Automotive's SEV project. The auto start-up company decided to halt its project of the SEV, a mini-size low-speed EV which it debuted in Europe, due to lack of regulation and subsidies to support the market adoption of such vehicles in China.