China announced plans to increase the uptake of EVs. This will strengthen the Asian electric cars market and help with environmental protection.
In the past week, China revealed a very ambitious EV adoption plan. The plan includes tax discounts for new electric vehicles and targets to increase the number of EVs within the next 6 years. This is expected to accelerate EVs industry growth, support Asian auto manufacturers and help in reducing air pollution.
On a recent trip to Asia, Dukosi predicted the rapid growth and collective efforts to boost the electric vehicles market. When the Chinese government announced new electric vehicle targets and tax reduction incentives, it came as no surprise to me.
What the government aims for is to put 500,000 “new energy” vehicles on Chinese roads by 2015 and 5 million by 2020. To implement these ambitious goals, the government will increase their purchase of government and public electric cars, by up to 30% by 2016. Additionally, there will be a 10% tax exemption on the value of all EVs and PHEVs to be bought from September 2014 until December 2017.
Increasing the uptake of electric vehicles is vital for China to move forward with its target of becoming the leading global market for electric vehicles. This strategy can significantly accelerate EVs market growth as it promises high interest and increased sales. Under this scenario, major international automakers will look into further expanding their Asian operations. For example, popular electric cars such as the Nissan Leaf and the BMW i3, which is expected to arrive in China in September, will benefit from this.
Domestic electric car manufacturers will also no doubt benefit from this programme as it will help to develop the sector. This will encourage investment in technology including EV batteries, components and energy management. These technology advancements would increase domestic car automakers capabilities of producing more efficient electric cars. Additionally, it will help Asian auto manufacturers to gain ground in the global industry. The latest rise in the stock price of BYD after the official announcements of this plan, is a positive sign.
With growing environmental issues and horrific air pollution, China’s decision to promote EVs makes sense and is a solution to vastly reduce air pollution. Reducing CO2 emissions and carbon footprint are positive steps towards the country’s environmental protection and this can be achieved though the widespread adoption of “new energy” vehicles.
For all kinds of reasons from financial to environmental, it looks like China has unveiled a promising EV adoption strategy and is taking actions to boost industry growth.