China electric-car rules ‘impossible,’ say carmakers; more deference to regulators needed?

It may be human nature to avoid doing things are that for the long-term good but impose short-term costs.

Exercising more, giving up smoking, or paying more for a car that is better for the environment all challenge many otherwise responsible citizens.

And it’s abundantly clear that the emergence and sales of electric cars benefit greatly from government regulations designed to encourage them.

DON’T MISS: China revises electric-car incentives to reward longer ranges

With the U.S. withdrawal from the Paris Climate Agreement, China is poised to emerge as the globe’s large-scale leader in reducing carbon emissions.

Its regulations to encourage electric cars are far more draconian and prescriptive than anything California might imagine in its wildest dreams.

The global auto industry, just like a confirmed smoker, is pushing back against stiff electric-car mandates now under discussion by China’s government.

Slide detailing Volkswagen Group China electric car plans (via Autohome)

Slide detailing Volkswagen Group China electric car plans (via Autohome)

Enlarge Photo

It’s not at all clear that China much cares what pain it will impose on the world’s established auto industry.

In fact, as one old China hand points out, the regulations likely serve a second purpose as well: to give Chinese makers a foot up against more experienced foreign companies.

That would further the country’s longstanding goal of dominating global electric-car production (as well as production of both lithium-ion cells and photovoltaic solar panels).

READ THIS: How California and China will push for millions of zero-emission vehicles

Reuters reported in mid-July that a coalition of European, Japanese, Korean, and U.S. auto-industry trade groups had sent a letter that called China’s new electric-car sales mandates “impossible” to meet.

The June 18 letter, it said, was addressed to the head of China’s Ministry of Industry and Information Technology. It was first reported by WirtschaftsWoche magazine in Germany.

It was signed by the American Automotive Policy Council, the European Automobile Manufacturers Association, the Japan Automobile Manufacturers Association and the Korea Automobile Manufacturers Association.

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)

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The rules spelling out sales quotas for battery-electric and plug-in hybrid cars are still in draft form, but they are to take effect in 2018. Under the current draft, one quarter of all vehicles sold in China are to have plugs by 2025.

The letter said the “ambitious enforcement date” of the latest draft “is not possible to meet,” and asked that implementation be delayed at least one year and that the regulations give makers more flexibility in meeting the quotas.

It raised several specific concerns:

  • The rules do not allow makers to “bank” credits for cars already sold and transfer credits among model years;
  • Foreign carmakers do not receive the same subsidies for producing new-energy vehicles and their batteries as Chinese makers do;
  • Automakers who don’t meet quotas may be banned from importing and selling plug-in cars altogether.

The ministry declined to comment to reporters on the draft rules.

CHECK OUT: VW too will launch electric-car joint venture in China with partner

Michael Dunne, who’s had more than two decades of experience in the Chinese market that is now the world’s largest, suggests that China’s bureaucrats may not be much interested in what the rest of the world’s auto industry thinks.

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