China NEV Alliances
Foreign equity OEMs acquire credits, and emerging EV automakers accelerate partnerships
|Renault CITY K-ZE (Renault eNuo)|
In the follow-up to the MarkLines report on China’s NEV (new energy vehicle) market dated January 2018, this report summarizes the changes that have taken place since then with regards to the major governmental policies related to NEVs and the status of NEV related partnerships since January 2018.
According to statistics released by the China Association of Automobile Manufacturers (CAAM) in July 2019, during the January to June 2019 timeframe, NEV production volumes were 614,000 vehicles, and sales volumes were 617,000 vehicles, both reflecting a YoY increase. One factor associated with the strong growth in the sales of NEVs in China is the government’s incentive subsidy mandate, which is already in the process of being reduced and will be eliminated entirely in 2020. Most recently, in March 2019, the government announced that it issued a notice to further refine the subsidy policy to promote the sales of NEVs, including more stringent technical requirements, changes to the standards, and reductions in the subsidy amounts, with the notice being effective starting from June 26, 2019.
From April 2019, the NEV credit system was introduced as part of the government’s new regulation to improve the fuel economy of passenger cars and to promote the popularization of new energy vehicles, commonly known as the double-credit policy, which obligates companies manufacturing (or importing) passenger cars to produce (or import) a fixed percentage of NEVs. As a result, foreign equity OEMs are scrambling to form alliances with Chinese OEMs already manufacturing EVs to obtain the credits. Conversely, to become certified to manufacture vehicles, the emerging Chinese EV automakers are engaged in activities such as consigning EV production to large or medium-sized OEMs, or acquiring other OEMs. On July 9, 2019, China’s Ministry of Industry and Information Technology (MIIT) issued a modified draft version of its NEV mandate policy, also known as the double-credit policy, that some had complained was too favorable to NEVs and led to an increase in the actual fuel consumption of traditional ICE-powered vehicles.
FY 2018 NEV Credit/Corporate Average Fuel Consumption Credit of OEMs（Aug.2019）
2019 Sales Forecast in China (CAAM): NEVs to make up 1.6 million of 28.1 million vehicles sold（Apr.2019）
SAE China 2018：NEV industry and related policies（Jan.2019）
Emerging Chinese EV makers: Rapid development with IT investment and partnerships（Apr.2018）
The current situation of China’s NEV market（Jan.2018）