Foreign Automakers Worried About Chinese Electric Car Policies

A June 18 letter was circulating worldwide about pleas of foreign automakers to the Chinese government in delaying and moderating sales targets of electric and hybrid cars. The automakers are saying that the proposals are nearly impossible to meet and would severely affect their businesses.

China’s Ambitious targets set to combat air pollution

The letter is addressed to the Chinese Ministry of Industry and Information Technology head since the communicated proposals are too ambitious. The Red Dragon of Asia is into setting goals for electric and plug-in hybrid cars as part of its means to combat air pollution.

Should the automakers fail to comply, it can cost them their licenses to sell non-electric cars in the Chinese market. Such event would deeply impact automakers’ businesses.

China is the world’s biggest auto market

“This will hit the industry pretty hard, especially well-known companies,” a statement by Liping Kang (Senior Manager at Innovation Center for Energy and Transportation.

In an agreement last month, German Chancellor Angela Merkel and Chinese Premier Li Kequiang approved of having concessions; however, the Chinese government released strict sales allocations.

Immediately, the U.S., European, Japanese and Korean automakers reacted, “The proposed rules’ ambitious enforcement date is not possible to meet. At a minimum, the mandate needs to be delayed a year and include additional flexibilities.”

China to reconsider the proposed penalties

Global automakers even asked China through a letter to reconsider the penalties to be imposed should any fail to achieve the quotas. Banning the carmakers is something that would cost their businesses a lot.

Moreover, they cry out for just treatment from the Chinese government since the present scenario depicts foreign carmakers being kept out from getting subsidies for NEVs (new energy vehicles) and batteries, wherein Tesla is at a great disadvantage.

“Because we have common concerns with the proposed NEV rules, we have joined together to offer, with utmost respect, six recommended modifications that address those concerns while still meeting the goals of those rules and other related policies. This preference for domestic automakers over import automakers undermines the environmental goals of the regulation, puts imports at a competitive disadvantage, and risks opening China up to international trade disputes,” automakers wrote in a letter.

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