As we often report, several countries are pushing some impressive goals to transition their car fleet to electric. Now China is feeling the pressure to act because of its growing air pollution problem and the country looks likely to turn to a ZEV mandate to achieve its own goals for the transition to electric transport.
The latest draft of the proposed legislation is pushing for a relatively aggressive mandate that is already causing some panic amongst automakers heavily investing in the country now that it has become the biggest car market in the world.
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These new proposals are always useful to show the true face of carmakers. Most of them are claiming unprecedented commitments to electric vehicles, but when new legislations are put forward to encourage those supposed commitments, they lobby against them.
We have witnessed it recently with strong lobbying against a possible strengthening of California’s ZEV mandate.
The latest example comes from China where a new proposed ZEV mandate being considered by the Ministry of Industry and Information Technology would see zero-emission vehicles (ZEVs) represent 8% of new car sales as soon as 2018 and quickly ramp up to 12% by 2020. China has about 20 million new car sales per year.
In comparison, Quebec is the latest market to adopt a ZEV mandate. The new mandated ZEV market shares, which are modelled after California’s mandate, are much slower to ramp: 3.4% in 2018, 6.9% in 2020 and 15.5% in 2025.
German magazine Suddeutche Zeitung is reporting that German automakers are worried about the proposed rule and they are now counting on Economy Minister Gabriel’s visit to Beijing in order to clarify the situation. German automakers are relatively big producers of plug-in hybrids, but they manufacture very few all-electric vehicles.
Under the latest draft of the proposed mandate in China, plug-in hybrids would get 2 credits while all-electric vehicles will get 4 credits. As the magazine reports, German automakers will be looking to know the threshold of all-electric range necessary to get the most credits possible. Otherwise, some of them could find it difficult to ramp up production in time.
A similar situation arose in Hong Kong earlier this year when German officials plead with Hong Kong regulators to increase plug-in hybrid incentives in order for German automakers to compete with Tesla, which currently has about 80% market share of Hong Kong’s electric vehicle market.
Hong Kong and mainland China are increasingly becoming important battlegrounds for electric automakers and we will be following closely a possible ZEV mandate, which could make the market even more interesting.