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Local protectionism should be broken down to promote NEVs

Source: China Economic Times | Date: Nov. 5

  • Beijing has decided to abort license-plate lottery for new-energy vehicles in its latest allocation of car license plates, making it more convenient for local consumers to buy such vehicles. However, a shortage of models available for sales has been inhibiting the promotion of new-energy vehicles.

  • The Beijing municipal government only subsidizes BEV buyers, thereby excluding non-local PHEVs from the local market. However, PHEVs are expected to contribute more to the promotion of NEVs, since underdeveloped infrastructure and range anxiety have made BEVs less popular than PHEVs. In addition to Beijing, other pilot cities selected to promote NEVs have also excluded non-local NEVs from local markets. Non-local NEV makers must invest to establish plants locally to enjoy subsidies offered by local governments.

  • As early as Sept. 2013, China's four commissions and ministries jointly released their "Circular on Continuing to Promote NEVs," a policy aimed at breaking down local protectionism. However, the policy has backfired.

  • China's NEV promotion is now progressing slowly. Figures show that at the end of 2014, the country's NEV ownership reached 100,000 units, far below a goal of more than 500,000 units set by the State Council.