Automotive Industry Annoyed China Gets to Decide What Engines It Offers
TTAC - By Matt Posky on June 20, 2017
With the possible exception of the United States in the near future,
emission regulations are getting harsher everywhere. Nowhere is that more true than China. Not only does Asia’s most populous country have some of the most stringent emission requirements for new cars, it also has the strictest sales quotas for electrically powered vehicles on the planet. Too strict, according to some automakers.
A Chinese draft regulation issued last week stipulates automakers must sell enough electric or plug-in hybrid vehicles to comprise 8 percent of total volume by 2018, 10 percent by 2019, and 12 percent by 2020. This comes after talks between Chinese Premier Li Keqiang and German Chancellor Angela Merkel that hinted China might have mercy on Germany manufacturers.
While Volkswagen has pleaded for China to reconsider the timeline, it has specified that it would adhere to the 2018 standards if forced to do so. Meanwhile, BMW flat-out said it couldn’t.
“Just like all the others, we were below 6 percent last year, and I mean significantly below,” BMW China chief Olaf Kastner told Automotive News China in the country where the carmaker has a joint venture with Brilliance China Automotive Holdings.
However, it’s not just German automakers that should be concerned. Most major manufacturers are trying to establish strong global sales while targeting China as a part of that endeavor. But the rules are different in China. Not only do companies have to get into bed with a Chinese firm just to do business inside the country, the stiff regulations are shaping the type of cars they can sell. The only way to stop this from influencing the sort of vehicles automakers sell worldwide is to have region-specific models, abandon the Chinese market, or play ball and offer more BEVs or plug-ins immediately.
According to Reuters, the most recent legislative draft by China’s Ministry of Industry and Information Technology is open for public comment until June 27. German Chancellor Angela Merkel announced at the start of the month that China had agreed to concessions on the timeline of quotas, but the most current draft does not reflect that. It’s unchanged from one issued in September, with no alterations relating to the proposed Merkel rescheduling.
Dominik Declercq, China’s representative for the European Automobile Manufacturers Association, said the new draft indicated China definitely had not changed its mind on the issue. “That’s what it looks like: no compromise, no concession,” Declercq explained.
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China upholds strict electric car sales quotas despite industry protests
Reuters-Technology News | Tue Jun 13, 2017 | By Michael Martina and Norihiko Shirouzu | BEIJING
China upheld strict sales quotas for electrically powered vehicles in a draft regulation issued on Tuesday, ignoring concessions agreed between Chinese Premier Li Keqiang and German Chancellor Angela Merkel earlier this month.
The draft, posted on the website of the Legislative Affairs Office for China's cabinet, maintains that automakers must sell enough electric or plug-in hybrid vehicles to generate "credits" equivalent to 8 percent of sales by 2018, 10 percent by 2019 and 12 percent by 2020 - criteria many in the industry deem too ambitious.
The number of credits per car is based on the level of electrification.
Merkel and Li did not give specifics on June 1 when stating that China would make concessions on the quotas, but industry sources told Reuters the two leaders had agreed to delay the 8 percent requirement to 2019 and allow automakers that missed the quota in early years to make up for it later on.
The latest draft by China's Ministry of Industry and Information Technology, open for public comment until June 27, is largely unchanged from one issued in September, with no change to the timings.
Dominik Declercq, China representative for the European Automobile Manufacturers Association, said the new draft indicated China had not changed its stance on the policy.
"That's what it looks like: no compromise, no concession," Declercq told Reuters.
German Ambassador to China Michael Clauss said: "It seems that the political leadership has understood that this is a problem but there seems to be a disconnect between them and the working level at MIIT."
China has been pushing to get more electric vehicles on its roads as soon as possible in order to fight urban air pollution but automakers and industry bodies have said the targets are too tough, while German policymakers say they fear they are part of a Chinese strategy to help domestic carmakers overtake global rivals in developing 'green' vehicles.
The quotas would come on top of stricter fuel economy requirements that are set to gradually become among the world's toughest by 2020.
The quota proposals had met with requests by carmakers such as Volkswagen AG (VOWG_p.DE) to be given more time to meet them, although VW's management has said it is prepared to comply with the 2018 quota if the government insisted.