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China is targeting new energy vehicles (NEVs) to account for 25%
of total car sales in the country by 2025, up from a 20% target set
in a 2017 planning document, reports Reuters, citing a statement by
the industry ministry. According to the draft proposal from the
ministry, China will continue to focus on development of electric
vehicle (EV) battery technology and improve the infrastructure for
hydrogen fuel-cell vehicles and connected vehicles. The country is
also reported to be considering introducing stricter green-car
quotas in the coming years that would push automakers to
manufacture a certain amount of NEVs.
Significance: China is one of the biggest
markets for NEVs globally. In 2018, the market for NEVs, which
include pure battery electric vehicles (BEVs), plug-in hybrid EVs
(PHEVs), and fuel-cell vehicles (FCVs), continued to expand at a
double-digit rate. Last year, total production of NEVs surged by
59.9% to 1.27 million units, while sales of NEVs increased by 61.7%
to 1.256 million units. BEVs remain the main sellers in the sector.
A total of 984,000 BEVs were sold in China during 2018, up 50.8%.
Sales of PHEVs reached 271,000 units in China last year, up 118%,
while sales of FCVs totalled 1,527 units. However, with the Chinese
government cutting subsidies on NEVs, sales in the segment have
declined over the last couple of months. The subsidies have been
reduced to almost half their 2018 levels and the government has
further raised the threshold for a vehicle to be eligible for the
subsidies. As a result, sales of NEVs declined 34.2% year on year
to 80,000 units in China in September. Last year, NEVs accounted
for less than 5% of total vehicle sales in China. Reaching a target
of 25% by 2025 will be a huge challenge for the Chinese
authorities, considering the subsidies have been cut.
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