China is one of the biggest EV markets in the world and many global automakers have developed electric vehicles particularly for the Chinese market. However, some carmakers like Toyota and Honda have also invested heavily in the hybrid technology and have been expecting support from the Chinese Government to promote the sales of hybrid vehicles. Finally, it looks like that the Chinese Government will consider their demand and has started focussing on hybrid vehicles as well in its new strategy for the auto sector.
Earlier this year, the Chinese government had introduced manufacturing and sales quota to promote new-energy vehicles which include electric cars, hydrogen fuel cell vehicles and plug-in hybrids. According to the quota rule, new-energy vehicle must account for 10 per cent of automakers fleet in 2019. The Ministry of Industry and Information Technology wants to amend the regulations and allow automakers to include more fuel-efficient hybrid vehicles in their line-up. Hybrid vehicles will be still categorised under the fossil fuel powered segment but will be classified as low-fuel consumption vehicles. The new rule is likely to help automakers in China to meet the environmental quota norms along with allowing them to add more hybrid vehicles in their product line-up.
The current rule requires automakers to manufacture 20,000 high performance EVs for every one million hybrid vehicles. If EVs do not meet the performance standards, then they require to manufacture more than 20,000 units as hybrids are grouped along with petrol and diesel vehicles, under the same category. That said, the new proposed rule will allow automakers to manufacture only 6000 EVs for a million hybrid vehicles, while the number of EVs for one million petrol or diesel vehicles will be increased to 29,000 units. China is also world’s largest car market and hybrid vehicles being more fuel efficient and low on emission will help carmakers to achieve emission targets in such a high-volume market along with improving sales.