China eyes petrol car ban, boosting electric vehicles

SHANGHAI - Agence France-Presse

China is gearing up to ban petrol and diesel cars, a move that would boost electric vehicles and shake up the world’s biggest car market in a country that is plagued by pollution.

The plan would follow decisions by France and Britain to outlaw the sale of such cars and vans from 2040 to clamp down on harmful emissions.

The government did not give a date for the ban, but the announcement drove up the shares of automakers and lithium battery makers in Asia, with Chinese electric car leader BYD closing 4.07 percent up in Shenzhen and Toyota up 1.22 percent in Tokyo.

Xin Guobin, vice minister of industry and information technology, told a weekend forum in the northern city of Tianjin that his ministry has started “relevant research” and is working on a timetable for China.

“These measures will promote profound changes in the environment and give momentum to China’s auto industry development,” Xin said in remarks broadcast by CCTV state television.

“Enterprises should strive to improve the level of energy-saving for traditional cars, and vigorously develop new-energy vehicles according to assessment requirements,” he said.

While Xin did not give a deadline, the head of the National Passenger Car Association, a Chinese auto industry group, said it would be “a long process.”

“It will be hard to stop producing traditional fuel-powered vehicles for the next decade or two decades,” the association’s secretary general, Cui Dongshu, told AFP.

“We may make significant headway in passenger cars in 2040 or even earlier, but for other products like the heavy-duty trucks it would be difficult.”    

Automakers “have not really tried hard in this sector” and consumers are not so familiar with new-energy vehicles, Cui said.

But Bill Russo, managing director of Gao Feng Advisory Group, said the move bodes well for Chinese automakers who are already able to compete with foreign car companies when it comes to making electric vehicles.

He added: “If China says no more ICE (internal combustion engines), the rest of the world will follow because the rest of the world can’t lose China’s market. It’s too big.”    

China produced and sold more than 28 million vehicles last year, according to the International Organization of Motor Vehicle Manufacturers.

The sale of new-energy vehicles topped 500,000 in the world’s second largest economy in 2016 -- over 50 percent more than the previous year, according to national industry figures. The majority were made by Chinese firms.

The government introduced draft regulations this June compelling automakers to produce more electrically-powered vehicles by 2020 through a complex quota system.

Xin said the policy would be implemented “in the near future”, according to the official Xinhua news agency.

As the measure looms, foreign automakers have announced plans to boost the production of electric cars in China.