On September 12, the Chinese government’s official website published the full text of the Action Plan for the Prevention and Control of Air Pollution (hereinafter referred to as the Plan), which proposed to "vigorously promote new energy vehicles". Its specific statement reads: "Industries such as public transport and environmental sanitation, as well as government agencies, shall take the lead in using new energy vehicles. Measures such as direct license plate registration and financial subsidies shall be adopted to encourage individual purchases. In cities including Beijing, Shanghai and Guangzhou, the proportion of new energy and clean fuel vehicles in the annual newly added or updated public buses shall reach more than 60%."
The Plan also requires strengthening the technological research and development of new energy vehicles and promoting the transformation and application of technological achievements.
It is widely expected in the outside world that a new round of supporting policies for new energy vehicles may be introduced soon after the release of the Plan.
Earlier on July 12, the executive meeting of the State Council proposed that government official vehicles and public buses should take the lead in promoting the use of new energy vehicles and improve supporting facilities simultaneously.
New energy vehicles have been put into commercial operation in Shanghai’s public transport sector. In February this year, the first batch of 30 low-noise, zero-emission "dual-power" buses were delivered for use in Pudong.
It is understood that there are about 20,000 public buses in operation in Shanghai at present, and industry insiders estimate that the number of newly added and updated public buses in Shanghai should exceed 1,000 every year. Ding Xiaohua, Deputy Manager of the New Energy Business Department of Shanghai International Automobile City, believes that although the Plan only sets requirements for the incremental quantity rather than the total quantity, the take-up of new energy vehicles by public transport, environmental sanitation and other industries as well as government agencies will definitely play a significant role in promoting new energy vehicles to truly enter the market by 2015.
A person from the Shanghai Municipal Transportation and Port Administration Bureau told the Morning Post that Shanghai may introduce relevant policies for new energy vehicles this month.
China has set an ambitious target for new energy vehicles.
In June last year, the Development Plan for the Energy-Saving and New Energy Vehicle Industry (2012-2020) proposed that by 2015, the cumulative production and sales of pure electric vehicles and plug-in hybrid vehicles should strive to reach 500,000 units; by 2020, the production capacity of pure electric vehicles and plug-in hybrid vehicles should reach 2 million units, with cumulative production and sales exceeding 5 million units.
However, a year later, the situation is not optimistic. According to the Economic Information Daily under Xinhua News Agency, by May this year, a total of 23,600 new energy buses of various types (over 10 meters in length) had been produced domestically, including 16,000 hybrid buses, 3,500 plug-in hybrid buses and 4,900 pure electric buses. At present, the proportion of domestic new energy buses in the large bus market is only about 10%, and the market share of electric vehicles is a mere 0.1%, far lower than that in Japan and Europe.
Many industry insiders believe that in view of the actual situation, the production and sales targets initially set by the government are overly optimistic.
According to data released by the China Association of Automobile Manufacturers, China produced 12,552 new energy vehicles and sold 12,971 in 2012. In the first half of 2013, the national sales of new energy vehicles were only 5,889 units. At this pace, it will be extremely difficult to achieve the target of 500,000 cumulative production and sales by 2015.
An unnamed person from BYD stated that although the government has previously introduced subsidy policies for new energy vehicles, after enterprises sell new energy vehicles to consumers at the subsidized price, the process of claiming these subsidies is quite complicated, requiring seal approval from multiple departments. It takes as long as half a year to finally receive the subsidies after completing the entire process. In addition, the fact that BYD’s new energy vehicles can only be registered for license plates in Shenzhen and not in other cities is also not conducive to the promotion of new energy vehicles.
"If the terms of the new round of subsidy policies expected to be introduced in mid-September are still relatively broad and lack detailed and implementable requirements, this policy is likely to remain a formality and fail to achieve the promotional effect," the person analyzed.
According to the disclosed version, in the new round of new energy vehicle subsidy policies, subsidies will not only focus on the consumption link, but also be provided for the R&D link and infrastructure construction. In addition to direct financial subsidy policies, a series of tax reduction and exemption policies for new energy vehicles will also be introduced.
In addition, in the new policy, the subsidy method is expected to shift from subsidizing local governments in the past to the central government subsidizing enterprises directly, in an effort to break the problem of local protectionism in the promotion of new energy vehicles.
The prevalence of local protectionism has long been a major obstacle to the promotion of new energy vehicles. Previously, the subsidy policies introduced by local governments failed to form a joint force with the relevant central subsidy policies. Local governments gave priority to subsidizing new energy vehicles produced by local enterprises and raised the access threshold for foreign auto enterprises, resulting in foreign enterprises being excluded from the scope of subsidies.
Ding Xiaohua said that to promote new energy vehicles, it is necessary to achieve large-scale sales. In addition to promotion in the public sector, the real entry into the market depends on household adoption. According to their two consecutive years of surveys on users who test-drove new energy vehicles at Shanghai International Automobile City, the acceptance of new energy vehicles among Shanghai households is constantly increasing. At present, the main hesitations are concentrated on a few issues such as the lack of fixed parking spaces for charging in residential communities.
