The current situation of China’s NEV market

Targeting production of 2 million units in 2020 and more than 7 million units in 2025

2018/01/22

Summary
China's NEV trend in 2017
Corporate Average Fuel Consumption and New Energy Vehicles Credits Joint Management Method Regulation
NEV credit management system and calculation method
LMC Automotive Prediction: Number of NEV credits to be imposed on each manufacturer (2018)
New EV automakers: major component suppliers also entering the industry
NEV trend of major OEMs
LMC Automotive Prediction: China's Electric Vehicle Market

Summary

(資料：中国工業和信息化部(MIIT)の発表、自動車産業中長期発展計画及びMarkLinesデータをもとに作成)

In January 2017, the "control stipulation for entry into the new-energy-vehicle production industry" policy was proposed to prevent the sort of wide-spread new energy vehicle (NEV) subsidy fraud perpetrated by a number of automakers in 2016, and to promote the sound development of the NEV market. The new policy clarifies the NEV market entry conditions for NEV automakers and requires NEVs to meet certain requirements to pass the inspections conducted by inspection agencies.
China's mid- to long term development plan, released in April 2017, sets out goals to strengthen its automotive industry to a level where it produces 2 million NEV units by 2020, and aims for NEVs to account for 20% of China’s total production and sales volumes by 2025; with the fuel efficiency of new passenger cars improving to 5.0L/100km by 2020, and 4.0L/100km by 2025. In September, the "Corporate Average Fuel Consumption and New Energy Vehicles Credits Joint Management Method Regulation” system was proposed, and annual fuel economy targets were set for all companies producing passenger cars. In addition, automakers that produce (or import) 30,000 or more internal combustion engine (ICE)-powered passenger cars are now required to manufacture a certain quantity of NEV vehicles.
Also, the government announced that models approved as NEVs on December 27 would be exempted from the vehicle purchase tax. The tax exemption period is January 1, 2018 to December 31, 2020.

The announcement of a series of NEV-related policies is changing the face of the industry, not only for automakers that are members of major OEM groups such as BAIC, Chery, and Geely who have been granted new NEV production licenses, but also for major local emerging automakers such as Minth and Wangxiang, as well as the major parts suppliers of the automaker groups.

Incidentally, the number of NEV units (including commercial vehicles) sold in the January to November 2017 timeframe increased by 51.5% year-over-year (y/y) to 609,000 units (504,000 EVs, 105,000 PHVs), while the market share for NEVs stayed at 2.4% (NEV market share was 6% in the same period of 2016).

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