China revises electric-car incentives to reward longer ranges

It’s long been official policy for China that the country’s automakers will become the world’s highest-volume producer of electric cars.

(It also intends to dominate lithium-ion battery cells and photovoltaic solar panels, for the record.)

But the government policies and incentives to achieve that goal have often changed over the years.

DON’T MISS: How California and China will push for millions of zero-emission vehicles

Now it appears that a proposed formula to reward the country’s makers of plug-in vehicles has been tweaked, to give more rewards to electric cars with longer battery ranges.

As Bloomberg reported in mid-June, the draft formula from the Ministry of Industry and Information Technology now applies a multiplier so that longer-range cars get more credit points while shorter-range cars receive fewer.

All plug-in cars with a rated range of 350 km (217 miles) or more on the local test cycle receive the maximum five points, as before.

The latest draft retains a starting date of next year, despite feedback from automakers that the previous version was overly ambitious.

Automakers are required to obtain a score for so-called New Energy Vehicles of at least 8 percent next year under the most recent version of the rules.

A group representing European automakers operating in China said in a statement that non-Chinese makers should also be eligible for the credits, which it urged should also be applied to imported cars.

READ THIS: VW too will launch electric-car joint venture in China with partner

As we often do, we reached out to longtime China hand Michael Dunne, founder of the consultancy Dunne Automotive Ltd., for context.

After looking over the news article, he commented not on the specifics but on the context in which it should be viewed:

Local and central policy makers tell me they will not back off their drive to make Chinese companies world leaders in electrics cars.

Buick Velite 5 to be sold in China (Chevrolet Volt in North America)

Buick Velite 5 to be sold in China (Chevrolet Volt in North America)

Enlarge Photo

When I met with several officials and industry people in June, they routinely rolled out the (Chinese policy code words) “resolute” and “unwavering” to describe their commitment to EVs. 

I believe them. The incentive and quotas, penalties and requirements might change — but not the goal.

Within that framework, China will continue to tinker with regulations. The aim is to extract maximum technology commitments from global automakers while also making sure key Chinese firms can also clear the bar and stay firmly in the game.

CHECK OUT: Tesla finds Chinese production site for electric cars: Shanghai

Global firms will be tested every step of the way. It is not good enough to be  a maker of quality products. If you’re not also tenacious in negotiating, there will be tears before bedtime.

(Did you note how the Germans had nothing to say at this point? They’re huddling—scrambling?—to devise a strong, united response.)

Everything in the People’s Republic starts and ends with the policymakers, a setup utterly different from our market-based system

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