China determined to hit EV target despite sales plunge
In China, sales of so-called new-energy vehicles (NEVs) last month dropped to 5,682 units, 74% less than in January 2016. The NEV category consists of battery-electric vehicles, sales of which dropped 68% to 4,978 units; and plug-in hybrid vehicles, which plunged nearly 90% to 704 units.
The dramatic plunge is the result of a government crackdown on companies that cheated in order to receive more subsidies for manufacturing NEVs. Beijing is forcing all manufacturers to reapply in order to receive the subsidies. Meanwhile, their current production is unsubsidised, more expensive, and less likely to sell.
Experts predict the plunge in NEV sales will be temporary, and the upward trajectory will resume as soon as more and more NEV models make it back onto the approved for subsidies list. An initial list of 185 models was released in January, writes China Automotive Daily. Last year, the various lists had given the green light to a total of 2,193 NEV models.
Despite the sales setback in January, the Chinese government continues to pursue its NEV introduction campaign. Thanks to generous subsidies, NEV sales began to boom in 2015. In 2016, NEV sales in China totalled 507,000 units, up more than 50% over the previous year, but short of the original forecast of 700,000 units. Experts blame the uncertainty over policy supports as a major reason for the shortfall.
For this year, the government target is 700,000 to 800,000 units – or an increase of at least 58% over 2015. China wants the introduction of NEVs to be pulled by demand rather than pushed by government measures, so it has reduced subsidies by 20% this year, and plans to eliminate them completely by the end of the decade.
In 2017, experts think demand for long-range pure-electric cars will increase, due to a number of factors: an expansion in production scale that will bring down cost, a further increase in vehicle range, and the continued, rapid growth of a charging network throughout the country.
In fact, the Chinese government is planning to install no less than 100,000 EV recharging units this year alone, to supplement the existing network of 150,000 units – many of which are installed along 14,000 km of highways, at 49-km intervals.
The densest networks are found in the big cities, with Beijing and Shanghai boasting public charging stations within 5km throughout their territory. Other cities, like Guangzhou and Shenzhen, are still working to expand their networks.
Image: CC BY-SA 3.0
| 14/02/2017 | Frank Jacobs