Car makers call on China to ease “impossible” EV targets

Car makers around the world have joined forces in urging China to delay and soften new electric vehicle targets, deeming current proposals “impossible” to meet.

A letter addressed to China’s Ministry of Industry and Information Technology, signed by more than 70 per cent of the industry, is the biggest show of resistance yet against New Energy Vehicles (NEV) in the world’s second-biggest auto market.

China has set the goals for electric and plug-in hybrid vehicles in a bid to combat increasing air pollution. It wants NEVs to make up at least one-fifth of Chinese auto sales by 2025, and hopes to achieve the lofty target with a staggered system of quotas beginning 2018.

Under the regime, car makers will be subject to harsh penalties over non-compliance, with China even threatening the cancellation of licences to sell non-electric vehicles.

"The proposed rules' ambitious enforcement date is not possible to meet," said the letter from US, European, Japanese and Korean auto industry bodies, first reported by Germany’s WirtschaftsWoche magazine.

"At a minimum, the mandate needs to be delayed a year and include additional flexibilities."

According to reports, the targets demand car makers sell electric or plug-in hybrid vehicles to generate ‘credits’ equivalent to 8 per cent of sales in 2018, 10 per cent in 2019 and 12 per cent by 2020.

Not only are the targets deemed too excessive, the letter (signed by American Automotive Policy Council, the European Automobile Manufacturers Association, the Japan Automobile Manufacturers Association and the Korea Automobile Manufacturers Association) urged China to soften some of the penalties for not achieving quotas.

The new targets have a silver lining for China’s domestic car makers, which are keenly embracing specialisation roles in electric vehicles. The framework creates a level-playing field against rivals that have decades more experience in internal combustion engines.

In addition, international firms are excluded from getting full subsidies for new energy electric vehicles and batteries.

"This preference for domestic automakers over import automakers undermines the environmental goals of the regulation, puts imports at a competitive disadvantage, and risks opening China up to international trade disputes," the letter said.

China is now the biggest producer of electric vehicles globally, reportedly comprising 43 per cent of manufacturing. The country’s progress in the electric field was heralded by a record-breaking Nurburgring lap in the Chinese-built Nio EP9 supercar earlier this year.