China is establishing a quota of electrified vehicles for OEMs producing in the country
- China has confirmed that car manufacturers will have a mandatory quota for production and sales of alternative energy vehicles (mainly hybrid and electric) starting in 2019, one year later than originally planned. This quota project was unveiled by the Chinese government in June 2017, and was to be implemented from 2018.
- Although postponed by one year, the principle of these quotas remains unchanged. Each alternative-energy vehicle produced and sold in China will represent a number of credits (higher for electric models than for hybrid models) and each manufacturer will have to accumulate 10% of credits on total sales in 2019, then 12% in 2020 and so on.
- OEMs who do not meet these quotas will have to buy excess credits from other manufacturers or pay fines. Clearly, this policy requires manufacturers in China to produce more and more hybrid and electric vehicles (nearly 10% of their sales in 2019, 12% in 2020, 20% in 2025 and 30% in 2030).
- High-volume manufacturers, such as Volkswagen and GM, will be particularly vulnerable to these new quotas,, as they will have to produce nearly 400,000 hybrid or electric vehicles by 2020 and three times more by 2030.
- Initially, the carmakers should have had an 8% quota on their sales in 2018, but the car industry has managed to postpone the quota application date by one year.
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