Global automakers have urged China to delay and soften planned quotas for sales of electric and hybrid cars, saying its proposals would be impossible to meet and would severely disrupt their businesses, according to a letter seen by reporters.
The June 18 letter addressed to the head of the Chinese Ministry of Industry and Information Technology is the most cohesive pushback yet from the industry against ambitious targets for so-called “new energy” vehicles in the world’s biggest auto market.
Keen to combat air pollution, China is planning to set goals for electric and plug-in hybrid cars to make up at least one-fifth of Chinese auto sales by 2025, with a staggered system of quotas beginning next year.
Beijing also sees the policy as a means to help the domestic car industry to compete with foreign rivals, which have decades more experience in internal-combustion engines.
The new rules plus planned penalties for non-compliance, such as the cancelation of licences to sell non-electric cars in China, has the potential to cause much pain for some automakers in the market.
“The proposed rules’ ambitious enforcement date is not possible to meet,” the letter from US, European, Japanese and South Korean auto industry bodies said. “At a minimum, the mandate needs to be delayed a year and include additional flexibilities.”
Beijing’s targets require that firms sell electric or plug-in hybrid vehicles to generate “credits” equivalent to 8 percent of total sales by next year, 10 percent by 2019 and 12 percent by 2020.
The auto industry bodies also asked for China to reconsider some of the penalties for not achieving the quotas, such as plans to ban automakers from importing and producing non-new energy vehicles altogether.
They also called for equal treatment of Chinese and foreign makers.
Currently, foreign automakers are excluded from getting full subsidies for new energy vehicles and batteries, leaving manufacturers such as Tesla at a disadvantage.
“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,” the letter said.
Chinese manufacturers are the biggest producers of electric vehicles worldwide, making 43 percent of the total last year, according to consultancy McKinsey & Co.
The letter was signed by the American Automotive Policy Council, the European Automobile Manufacturers Association, the Japan Automobile Manufacturers Association and the Korea Automobile Manufacturers Association.
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