Chinese auto-executives hope for rebound in electric vehicle market
Beijing’s cut to subsidy hits manufacturers hard
Senior automobile executives in China have argued that there will likely be a rebound in new energy vehicles (NEVs) next year but that the scale of this rebound will depend on supportive government policies.
As one of the world’s worst polluters and fastest growing economies China has come under pressure internationally to promote the use of electric vehicles. Internally Beijing has accepted some of this criticism and sought to reduce automobile emissions and pollution.
Earlier this year it implemented production quota requiring automakers to reduce emissions in new cars by 30 per cent. While only last month it gave its approval to a mega-factory for the American electric car brand Tesla.
However, other manufacturers of NEVs, which includes hybrids, battery-only electric vehicles and hydrogen fuel cell-powered cars, have struggled as a result of recent government policies. Beijing has cut subsidies for the production of such vehicles in China by a substantial amount. This mounting cost of production has been passed onto the consumer and as a result elective car sales fell 45.6 per cent in October on the same period in 2018.
At the Guangzhou Autoshow, automakers such as Volkswagen, Toyota’s Lexus, Daimler’s Mercedes Benz and Tesla showcased their upcoming new energy vehicles in the hope of returning to the heady days of 2018, when sales jumped 62 per cent on the year previous.
Fu Bingfeng, executive vice-chairman of the China Association of Automobile Manufacturers (CAAM), the country’s leading auto industry body, recently outlined the progress of ongoing talks with Beijing as well as the industry’s strategy going forward: “Our works now will focus on boosting real consumption-side demands, including improving infrastructure and supply chain.”
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