The B2B platform for full-electric and plug-in hybrid electric vehicles: Policy News

With two-thirds of its oil imported and 150 million vehicles and petroleum consumption expected to exceed 250 million tons in 2020, China has a compelling need to reinvent its propulsion model. This second article looks at China’s opportunities to drive the standards and architecture for the global auto industry through present and future policy initiatives.

At the first event in its series to prepare for the Copenhagen climate discussions, the European Chamber of Commerce called leading market players and decision makers together to discuss the “Outlook on Electric Car Development” in China last month. In their presentations, consultancy Roland Berger and Synergistics outlined the past and current policies that affect EV/PEV uptake in China.

From 100 million RMB in 1999 to 1.1 billion RMB in 2008:

From 1999 to 2002, the Chinese government invested 100 million RMB in its Clean Auto Action. The focus was on reducing air pollution from big cities and by improving the emission of fossil fuel vehicles to meet Euro II Standard, CNG and LPG vehicles’ R&D and demonstration.

From 2002 to 2006, the government invested 880 million RMB in its Electric Vehicle Key Project. Prototypes of Battery Electric Vehicles and Hybrid Electric Vehicles were developed and produced whilst 7 demonstration projects of BEV and HEV were launched. 26 national standards were established and 796 patents applied.

The latest Energy Saving and New Energy Vehicle Key Project (2006-2010) in the 863 programme saw a considerable 1.1 billion RMD investment from over the first two years. In April 2009, Prof. Wan Gang announced an ambitious plan in Cooperation with the Ministry of Finance & the National Development and Reform Commission. The collaboration’s big lines are as follows:

• to promote the use of NEVs initially targeting 13 pilot cities, including Beijing, Shanghai, Chongqing, Changchun, Dalian, Hangzhou, Jinan, Wuhan, Shenzhen, Hefei, Changsha, Kunming, and Nanchang
• to support the development of energy-saving technology for use in government fleets, including buses, postal, and sanitation vehicles
• to deploy 60,000 energy saving vehicles in China by 2012

Roland Berger’s new energy policy launch calendar:



(see calendar in presentation)

According to the recently published “Auto Industry Revitalization Plan”, new industry policies will likely bring substantial fiscal benefits. These will:

• reduce vehicle purchase tax to 5% for 1.6L & below displacement
• grant RMB 10 billion fund to support enterprise tech innovation, tech reform, new energy car and parts development
• provide subsidy for application of energy saving and new energy vehicle in major cities
• implement new energy vehicle strategy, foster industrialisation of electric cars and parts
• foster pure electric, hybrid & other new energy car by subsidy and preferential taxes
• set fiscal/tax reward & penalty mechanism based on product fuel economy level
• impose special penalty tax to low fuel economy level vehicles
• impose differential fuel taxes

Examples of projects being carried out in China at the moment:

Beijing: purchased 800 HEV buses from Beijing Foton
Shanghai: hydrogen fuel cell car project was initiated by Shanghai Major Project Promotion Office as 2008 Olympics project
Jinan: promotes NEVs and plans to use HEV buses to replace some of the old bus system to meet the requirement of National Sports Meeting in the fall
Shenzhen: is going to establish a charging station in the downtown area for NEVs and F3DM duel mode EV was first launched in Shenzhen which is the first mass produced duel mode EV in the world
Wuhan: becomes new energy resource experimental unit for Nissan, and Nissan will contribute 300 HEV buses in the city.
Chongqing: bought 10 HEVs from Changan Group
Changchun & Dalian: Partnered with FAW