China reclassified petrol-electric hybrids, allowing manufacturers to better comply with the regulations of the environmental quota.
In China some of the strictest regulations in the world regarding the production of cars using fossil fuels as the country struggles with high levels of air pollution in crowded cities.
These rules have prompted both local and international automakers, including Tesla and Volkswagen, to spend billions of dollars on development and production of new-energy vehicles (NEV) electric vehicles, hybrids and fuel cell vehicles.
Automakers in China are required to produce NEV to receive ZEV credits (Zero Emission Vehicle credit) to offset sales of vehicles that pollute the environment.
ZEV-credits or earned through the sale of “clean” cars, or purchased from other producers of “clean” cars that have excess credits. The inability to recruit the required number of credits shall be punished by a fine. However, the system has been criticized for offering little incentive for automakers to increase efficiency in the development of gasoline-powered cars.
the Policy was published Monday by the Ministry of industry and information technology of China, allows the automakers to gradually do more gasoline-electric hybrids and less expensive all-electric cars from 2021 to 2023.
These hybrids will still be considered as vehicles operating on fossil fuels, but are reclassified as “passenger cars with low fuel consumption”.
According to experts and industry representatives, this could mean replacing a larger number of gasoline vehicles to hybrids, as in this case, automakers to face fewer regulatory problem.
Experts believe that the beneficiaries of such changes will become world leaders in petrol-electric hybrids, Toyota Motor and Honda Motor, as well as Chinese manufacturers Geely Automobile Holdings Guangzhou Automobile Group and supplier Hunan Corun New Energy.
China hopes that by 2025 the share of NEV will have about a quarter of all sold in the country of cars.