China Ministry of Commerce Issues Guidelines to Promote Auto Consumption... Considering Exceptions to Electric Vehicle License Plate Restrictions
Targeting 20% of New Car Sales as Electric Vehicles by 2025, Equivalent to 5 Million Units Annually
[Asia Economy Beijing=Special Correspondent Jo Young-shin] China is reportedly preparing a plan to exempt the license plate purchase restriction policy to expand the supply of electric vehicles. This plan is being reviewed in line with the Chinese government's goal to convert 20% of new car sales in 2025 to electric vehicles.
According to the state-run Global Times on the 10th, the Ministry of Commerce of China announced yesterday through the 'Automobile Consumption Promotion Guidelines' that it is studying a plan to exempt the license plate restriction policy when households without cars purchase new energy vehicles such as electric cars.
Since the early 2010s, China has limited the annual issuance of automobile license plates by city to address urban air pollution problems. Because of this, in major Chinese cities such as Beijing and Shanghai, one must secure a license plate through methods like lotteries or auctions to operate a vehicle.
The central government’s initiative to provide license plates without restrictions to households without cars aims to dramatically increase sales of new energy vehicles centered on electric cars.
Amid the Chinese automobile market’s three consecutive years of decline from 2018 to 2020, the central government has been urging local governments for several years to ease automobile purchase restrictions.
Accordingly, Beijing, where the restriction policy is the strictest, temporarily issued an additional 20,000 new energy vehicle-specific license plates last year, and some local governments increased the number of license plates issued in response to the central government’s demands.
Despite the overall downturn in the automobile industry, electric vehicle sales have steadily increased, and the center of the Chinese automobile market is gradually shifting toward electric vehicles.
According to the China Passenger Car Association (CPCA), passenger car sales in China in 2020 were 19.288 million units, a 6.8% decrease from the previous year, but sales of new energy vehicles, combining plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV), increased by 9.8% to 1.109 million units.
Above all, interest in new energy vehicles such as electric cars is rising as the Chinese government has announced plans to convert 20% of new car sales in 2025 to electric vehicles and 40% to hybrid vehicles. The Chinese government has set a policy to expand the electric vehicle share to 40% by 2030 and 50% by 2035.
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