As we previously reported, virtually all automakers (except for Tesla) have asked China to slow down their electric car mandate.
Today, the Chinese government announced that they are delaying the implementation of the mandate by a year, but it’s not to say that the auto industry lobbying had its way entirely.
China previously announced a scheme for automakers to need zero-emission vehicles (ZEVs) to represent 8% of new car sales as soon as 2018, 10% in 2019, and 12% by 2020.
The Ministry of Industry and Information Technology announced today that they are canceling the requirement for 2018, but they are keeping the 10% requirement in 2019 – meaning that the ramp is steeper, but automakers still have one more year to prepare before their business is impacted.
The impact is similar to other ZEV mandates, like in California, where if automakers don’t accumulate enough credits through the sales of zero-emission vehicles, they have to purchase them.
Like in California, some automakers are expected to just buy the credits.
Colin McKerracher, an analyst at Bloomberg New Energy Finance, estimates that the 12% requirement in 2020 would translate to “about 4 percent to 5 percent of actual vehicle sales.”
Most automakers who have commented on the updated plan so far have been supporting the move.
What they did is allow automakers to keep selling more air polluting products that they know are killing people for one more year.
At the core of it, that’s what they did.
With this said, China’s mandate remains one of the most, if not the most, aggressive electric vehicle adoption plans and it recently resulted in massive investments in the production of electric cars in the country.
Ultimately, it’s what will have the most impact.
But we have seen automakers pulling out of EV investments in the past after regulations got more relaxed. So hopefully, this is the only delay that the Chinese government will allow.