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New energy vehicles drives China’s auto industry

By Lv Yanhao, Fu Yaning (People's Daily Online)    14:12, July 20, 2019


Beijingers like to talk about air quality as much as Londoners like to discuss the weather.

Back in 2014, if one wanted to experience early 20th-century London when it was "the city of fog," he could come to Beijing, where he could enjoy almost the same experience.

Today, in 2019, if one wanted to come to Beijing to experience the smog, he would be disappointed.

"In the years of the heaviest haze, I could never have imagined that one day driving a new energy car would protect our environment and help to bring the blue sky back to Beijing," Kong Qi, a resident in Haidian District of Beijing said. She added, "I give all the credit to the new energy vehicle (NEV)."

Indeed, NEVs play a significant role in environmental protection in China. It took Beijing only five years to see substantial environmental changes. It's easy to forget that London spent 30 years trying to bring back the blue sky.

In additional to environmental benefits, NEVs are of great importance to the country's industrial upgrading. Similar to what iPhone means to the phone industry, the successful development of the NEV will decide if China leads the world in one of the most critical future tech fields.

According to a guideline issued by the Beijing Municipal Government on July 2018, to further popularize new and clean energy sources, the capital encourage the purchase and use of NEVs. The city set a goal of having 400,000 NEVs by the end of 2020. Newly added or replaced buses, taxis, sanitation trucks, postal and light logistics vehicles will all basically be electricity vehicles.

Beijing, as a megacity, is attempting to bring the blue sky back to its citizens, thus both the government and its citizens see a greater incentive to introduce NEVs. However, in rural areas where resources are relatively scarce, the development of NEVs tends to be more arduous.

With relatively low incomes, limited market demand, and poorly-equipped supporting infrastructure, the charging and maintenance of new energy vehicles in the countryside are not as convenient as in urban areas. Despite these unfavorable conditions, the Chinese government attaches great importance to NEV development in rural areas.

Li Zuojun, a researcher from the Institute of Resources and Environmental Policy, Development Research Center of the State Council, believes in the potential of the future rural market. "The opening of the rural market could promote the development of related industries and optimize the industrial structure of the rural economy," he said.

By the end of 2018, the total global sales of new energy vehicles exceeded 5.64 million units, with China accounting for 52.8 percent, ranking first in the world for four consecutive years. According to data provided by the China Automobile Industry Association, while China's automobile market shrunk from January through May last year, the production and sales of new energy vehicles reached 1.27 million and 1.25 million respectively in 2018, 59.9 percent and 61.7 percent higher than the previous year.

Data from the Ministry of Industry and Information shows that the production and sales of NEVs reached 304,000 and 298,900 in first quarter of this year, a year-on-year growth of 100 percent and 110 percent, respectively.

The reason behind China's NEV boom is that the Chinese government attaches great importance to the development of NEV and various measures have been introduced to meet the needs of innovators.

On July 2, Chinese President Xi Jinping sent a congratulatory letter to the 2019 World Energy Vehicle Congress held in Bo'ao, south China's Hainan Province. Staying committed to the path of green, low-carbon, and sustainable development, China is willing to work with the international community to speed up the innovation of new energy vehicle technologies and the development of related industries, President Xi said.

Meanwhile, some car giants like BMW, Volkswagen, and Chinese brands of BYD and Geely have also released NEV strategies. Electrified, intelligent vehicles have become the primary trend for automotive development and experienced explosive growth in recent years.

In addition, China constantly optimized its subsidy policy for new energy vehicle industries. In the past, the country's direct subsidies to NEV enterprises led many car makers to pursue quantity rather than quality. Now, according to the latest regulations, grants for new energy vehicles have gradually been reduced. This forces NEV enterprises in China to shift their focus from how to take more subsidies to how to improve the competitiveness of products.

In addition to supporting automobile companies, the Chinese government is promoting infrastructural construction. According to Xinhua, China's charging network construction has been steadily advancing, and the coverage of public places, highways, and other areas has increased significantly. By the end of 2017, 214,000 public charging piles had been built nationwide, ranking first in the world.

Limited range and the difficulty of charging are the most realistic problems that users face. Solving these problems will lay an environmental foundation for the large-scale use of new energy vehicles.

With governmental support, the efforts of enterprises and consumer confidence, new energy vehicles are expected to drive forward the transformation and upgrading of China’s auto industry. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Sheng Chuyi, Bianji)

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