China loosens standards for environmentally friendly cars

Beijing wants to relax the requirements for environmentally friendly vehicles this year. The car market has suffered heavily from the corona crisis.

NIO – a Chinese start-up based in Shanghai that specializes in the manufacture of electric cars – (photo by NIO)

The Chinese government plans to ease the obligations for auto manufacturers in the People’s Republic to produce environmentally friendly drives this year. This emerges from a decision published on Monday on the website of the Chinese Ministry of Industry.

Beijing had introduced a points system some time ago to promote alternative vehicle drives. This system obliges automakers in China to dedicate a certain proportion of their production to non-combustion vehicles. This includes not only electric cars, but also plug-in hybrid vehicles and vehicles with hydrogen fuel cells.

Depending on the model, the manufacturers get a certain number of negative or positive points. Since 2019, automakers in China have had a minimum quota of ten percent for the sale of more environmentally friendly vehicles. In 2020 this rate should rise to twelve percent.

German manufacturers resisted the introduction of the point system in China. The quota had even become a political issue. In view of the massive drop in demand caused by the corona crisis, Beijing is now softening the quota. The Ministry of Industry wants to allow manufacturers to no longer track the production of vehicles with alternative drives this year as long as they make up for the failures next year.

Generous subsidies for alternative drives

Based on the development of the automotive industry, the ministry can decide “that car companies will use the positive points generated in 2021 for vehicles with new energy to compensate for the negative points generated in 2020 for vehicles with new energy,” it says in the Ministry’s decision published on Monday.

Central and local governments had taken numerous measures since the beginning of the corona crisis to support the auto industry. In March the drop in sales was around 40 percent compared to the same period last year, in February 79 percent. Governments then distributed more generous permits for new vehicles in major cities.

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