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Aug. 7 Newsletter

Industry Trends

Chinese NEV industry has bright prospects: opportunities outweigh challenges

  • Data shows that car production and sales in the first half of 2017 increased 4.6% and 3.8% respectively on a year-on-year basis. Specifically, the production and sales of new energy vehicles climbed 19.7% and 14.4% respectively.

  • It is said that China’s car industry is facing energy, environmental and traffic challenges as well as opportunities like the introduction of the energy-saving and new energy car technological roadmap, vehicle electrification and the popularization of connected vehicles.

  • In general, the Chinese car industry is facing challenges and opportunities at the same time, but its opportunities outweigh challenges.

  • China has been ranked first in NEV ownership, while fuel-cell vehicles are a major trend for the development of the NEV sector in this country. In this light, China has set comprehensive goals for the development of the NEV industry. Specifically, NEV sales should account for 15-20% of the overall car sales by the year 2025. (, Aug. 7)

Passenger vehicle market to reach sales of over 30 million units, growth slowdown is a sign of new normal

  • China's passenger vehicle market reported sales of around 11.25 million units for the first half of this year, up 1.61% year-on-year. Compared with the same period of the previous year, the growth rate dropped 7.62%.

  • The State Information Center estimates that the domestic passenger vehicle market will achieve sales of 34 million units by 2026. With the development of the rural economy, the rural market will make a big contribution to the sales of the passenger vehicle market. Currently, third- and fourth-tier cities are becoming new growth points for auto consumption. The car rental industry will also drive the growth of new car consumption. 

  • On the whole, new car sales are expected to grow steadily before 2020, thanks to increasing purchasing power of young customers. The sales growth of the passenger vehicle market is predicted to slow down after 2020, affected by several factors, including the strong impact from the car sharing business. (Car Review, Aug. 7)

Excessively tough policies likely to be changed; six major policy directions proposed for NEVs 

  • The 2017 blue paper on new energy vehicles (NEVs), which was released on Aug. 3, has proposed six major policy directions, including a higher threshold for investment in pure electric cars and possible extension of NEV purchase tax exemption. 

  • According to the blue paper, new policies governing investment, taxation, subsidy, and management are expected to be launched over the next year. Under the new policies, the threshold of investment in NEVs will be further raised.  Tax exemption for the purchase of NEVs will continue in 2018. The subsidy policies for NEVs will not be phased out until 2020. Excessively tough policies, such as the limitation of 30,000km mileage for subsidy application, will be changed.

  • In addition, the NEV Credits for Passenger Vehicle Enterprises will be launched as soon as possible to promote the healthy development of the NEV industry. (, Aug. 7) 

Shenzhen doubles subsidies for charging piles while decreasing NEV subsidies in 2017

  • The Shenzhen government recently published a notice on financial support for the promotion and application of new energy vehicles (NEVs). Compared to last year, NEV subsidies have been decreased sharply on the whole, while subsidies for the construction of charging piles have been increased.

  • All-electric and plug-in hybrid passenger cars will be eligible for fewer subsidies than last year. The subsidy standards for pure electric buses, cargo vans, and special vehicles have been adjusted mainly to subsidy reduction. Notably, subsidies for fuel cell vehicles (FCVs) remain unchanged. 

  • One-time subsidies for charging and subsidies for pure electric taxi operation have been canceled this year.

  • Subsidies for charging piles have been doubled compared to last year. (Southern Metropolis Daily, Aug. 7)

Latest Car Models

FAW-Volkswagen's T-ROC SUV to be unveiled on Aug. 23

  • Volkswagen recently released trailers for the T-ROC's production version, showing some design concepts of the new model that will be officially unveiled on Aug. 23.

  • Positioned as a small-sized SUV, the new model will be built based on the MQB platform and adopt Volkswagen's latest overall design style.

  • The new model will reportedly also be produced by FAW-Volkswagen with an extended body length. (, Aug. 6)

New-generation BMW X4 M may be released in 2018

  • Foreign media recently revealed the latest information about the new-generation BMW X4 M, which is expected to be released in 2018.

  • Reportedly to be built based on the CLAR platform, the new model will feature a more aggressive appearance than the standard X4.

  • It will receive the 3.0T engine that powers the BMW M3 and M4. Rumors have it that the engine may have a maximum power output of over 500Ps in the X4 M. (PCauto, Aug. 7)