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China Sees The Competitive Advantage In Producing Green Vehicles


While Chinese auto sales are potentially heading for a drop this year, one silver lining for this industry is the production of green cars; seeing quadruple the sales in 2015. As such, Beijing is encouraging automotive manufacturers to create battery electric vehicles, viewing this as a good opportunity to close the competitive gap, globally.

And it’s really a win-win situation; Rueters explains these electric cars are not only simpler to produce, but also fit the current pollution reduction policy goal of Chinese President Xi Jinping. As such, Chinese auto manufacturers are earmarking a minimum of 50 billion yuan ($7.86 billion) in 2015 when it comes to the production of these ‘new energy’ cars.

According to the China Association of Automobile Manufacturers (CAAM), plug-in and electric hybrid auto sales increased world-wide by 270 percent to over 108,000 in 2015, between January and August; and with 130,000 produced in China, the country is on the road to surpassing the United States as the global leader when it comes to developing these types of vehicles. As such, the government is set to produce one million of these cars by 2020.

There will also be incentives for drivers in China to go green … when it comes to cars that is. Shanghai drivers will have the opportunity to save close to 182,600 yuan ($28,600) when they choose a new energy car (over a gasoline-powered vehicle) through a free license plate initiative. Further, Beijing commented in April that it would unfold subsidies quicker than expected, and is potentially moving forward with fuel economy requirements that will become increasing stricter as they head towards 2020. While they haven’t gone into detail with how requirements will be enforced, Great Wall Motor Co. released a study in August that suggested automobile manufacturers could face high fines if they fail to meet requirements.

According to Beijing Auto’s Xu, the Chinese government is also planning a California-style best practice that rewards automakers and drivers alike for choosing green cars; while potentially punishing those who turn to good old fashioned gasoline-powered vehicles.

Auto manufacturers in China are thus revving up the stakes, and investing in new energy cars, with Geely Automobile Holdings and Great Wall currently gathering money specifically for new energy vehicle projects. As such, foreign makers are putting their hats into the ring, with SAIC Motor Corp partnering up with General Motor’s for a joint venture that would see 26.5 billion yuan invested in green car products by the year 2020.