The decarbonization of the transportation sector, which accounts for about 21% of all anthropogenic CO2 emissions worldwide, is crucial to achieving more general climate goals. China has continuously implemented rules and policies over the past ten years to cut new cars and trucks’ fuel consumption and encourage the use of electric vehicles. The nation’s electric vehicle market saw a spectacular expansion during this time. However, ICCT’s emissions modeling reveals that in order to fulfill the aforementioned goals, the rate of development must be accelerated moving forward.
China unveiled a variety of new programs to boost consumer demand for cars, including proposals to enhance the tax credit for EVs (electric vehicles), boost the number of charging stations, and encourage lower charging prices. Geely and Great Wall Motor both saw gains of 6% and 4% following the plans’ announcement by the Ministry of Commerce in conjunction with 16 other departments.
The strict lockdowns implemented in Shanghai and other regions of the country in recent months to stop the Omicron coronavirus type spread have had a significant negative impact on the world’s largest auto market. As part of the new initiatives, authorities last month reduced the auto purchase tax for vehicles with 2.0-liter or smaller engines priced under $45,000 (300,000 yuan) by half to 5 percent.
Since 2014, purchasers of a few electric and hybrid vehicles are exempt from paying the purchase tax. A plan to reintroduce it next year may now be canceled, according to the ministry, confirming a stance first expressed by the country’s cabinet last month. According to early figures from an automobile association, the lowering of the levy has helped the market bounce, with June passenger vehicle sales up 22% year on year to 1.9 million units.
Sales of electric vehicles (EVs) increased by 130 percent last month to 546,000 units or nearly 30 percent of all vehicle sales. Market leader BYD Co Ltd saw a more than tripled increase in sales to 134,000.
A program that has been credited with accelerating the expansion of the sector, known in China as new energy vehicles, was not mentioned in the commerce ministry’s announcement regarding any renewal of subsidies. Authorities and automakers were in discussions about extending the program, according to a May report from Reuters. In addition, the ministry announced that it will improve credit support for auto purchases, promote the replacement of outdated vehicles, and lower obstacles to cross-province used car sales.