China plans to plug a regulatory gap and begin overseeing low-speed electric vehicles used mainly in the country’s rural areas, legitimizing a market segment that dwarfs sales of regular battery-electric cars made by the likes of BYD Co (比亞迪) and Tesla Motors Inc.
Under the regulatory framework, there are no rules governing the production and sale of electric vehicles (EV) with top speeds below 100kph.
The result has been a proliferation of cheap, poorly made EVs powered by polluting lead batteries that pose a threat to road safety and the environment, the Chinese Ministry of Industry and Information Technology said in a statement on its Web site.
The government is to legalize manufacturers that meet the standards governing EV start-ups and regulate them under those requirements, while enacting technical specifications for the rest, the ministry said.
Those that do not meet the new benchmarks, which are under discussion, would be closed down, according to the statement.
“The move will force existing electric-vehicle makers to speed up product development and compete for consumers,” said Cui Dongshu (崔東樹), secretary-general of the China Passenger Car Association. “It is great news for low-speed electric car makers as they can finally make cars legally.”
In Shandong Province alone, more than 330,000 of the unregulated low-speed EVs were sold in the first eight months of this year, more than the 245,000 officially approved new-energy vehicles delivered across the country in the same period, according to auto association data.
In taking steps to legalize an industry that has been growing rapidly despite regulatory ambiguity, the government is to boost market leaders, such as Shandong Shifeng Group Co (山東時風), as well as start-ups like Chehejia (車和家), whose founder Li Xiang (李想) started China’s leading car-buying portal, Autohome Inc (汽車之家).
“We will continue to work with other government agencies to speed up introduction of relevant regulatory measures and push forward development of the low-speed electric vehicles,” the ministry said.
China has been issuing production licenses to newcomers to the auto-making industry as part of its push to encourage innovation.
Companies from Internet video billionaire Jia Yueting’s (賈躍亭) Le Holdings Co (樂視控股) to start-up WM Motor, founded by a former top executive of Zhejiang Geely Holding Group Co (吉利控股集團), have raised billions of US dollars in a bid to enter the world’s biggest car market, including for electric vehicles.
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