New policies set to boost China's new-energy car market

Want China Times, Staff Reportor 2014-08-20

A new-energy car at the Wuhan Auto Service Industry Expo International,
Aug. 10. (Photo/Xinhua)

Beijing has introduced a series of measures that are expected to provide a shot in the arm to the new-energy vehicles market this year, according to Shanghai's National Business Daily.

China sold merely 17,533 new energy vehicles in 2013, but 20,000 were sold during the first half of this year, according to data from the China Association of Automotive Manufacturers.

The 20,000 figure remains quite small, however, compared with the 11.68 million cars sold nationwide in the first half of this year. However, a slew of new measures are expected to help accelerate the development of the market this year and boost sales to between 60,000 and 150,000 vehicles.

New-energy vehicles include fully functioning electric cars, plug-in hybrids and those powered by fuel cells.

The wave of favorable policies introduced during the first half is expected to create enormous opportunities in the market, and domestic and foreign automobile makers are competing to roll out new models of green cars.

Industry experts believe the entry of foreign companies and joint ventures with local automakers will help form a manufacturing chain and improve manufacturing techniques.

On the other hand, domestic carmakers have stepped up their entry into the sector. They produced 20,700 and sold 20,500 new-energy vehicles in the first half of this year, reflecting a 230% and 220% year-on-year growth, respectively.

Since domestic automakers play a dominant role in the fully electric car market, they are likely to be the largest beneficiaries of the new round of preferential policies. However, after the new policies come into effect, carmakers will have to develop a new business model for marketing new-energy vehicles and boosting profitability, according to the report.

Meanwhile, since an insufficient number of charging stations are frequently cited as the reason for low public enthusiasm for new-energy vehicles, more still needs to be done in this area.

In addition, a new market making new energy vehicles available only for rent or leasing is expected to emerge due to the preferential policies, according to the report.