Market News

 September 05, 2018
China ministry names and shames 30 car firms for not making enough green vehicles

 China's industry ministry has publicly named 30 car makers that have not met its requirement to produce new energy vehicles for at least one year, as it pushes for greater adoption of green vehicles to cut pollution and to further its goal of becoming the global industry leader.

Companies on the list include Brilliance Auto, Hafei Motor, Guangqi Honda -- a joint venture between Japan's Honda Motor and Guangzhou Auto, Changan PSA, jointly owned by PSA Groupe of France and Changan Auto, and another Changan joint venture, Changan Suzuki, with Japan's Suzuki Motor.

China, already the world's largest market for electric cars, has spent billions of dollars in subsidies to aid the development of the green vehicle industry, but after widespread cases of fraud it began a crackdown two years ago, including cutting subsidies, raising technical thresholds and tightening investigations.

From April this year the ministry imposed a new set of rules that forced car makers to earn credits for various factors including new energy vehicle output -- which has to be above 10 per cent of their traditional vehicle output by 2019 and above 12 per cent in 2020 -- or face sanctions.

In China, new energy vehicles include electric ones, plug-in hybrids and fuel-cell cars.

According to the new rules, the ministry is likely to launch a new round of inspections into the companies on the list to check whether they are qualified to manufacture new energy vehicles.

For those that fail the inspection, they may not be able to produce or sell green cars. In addition they could face the cancellation of the purchase tax exemption for specific models.

In 2017, China produced 794,000 new energy vehicles and sold 777,000, up 54 per cent and 53 per cent respectively from the previous year.

Last week, Song Qiuling, an official from the Ministry of Finance, said at a public forum on China's new energy vehicle industry that government support has enabled a rapid growth in the electric car industry.

But she also detailed several key challenges, including a structural oversupply, a large quantity of low-quality cars and a lack of competitiveness among electric car makers reliant on government subsidies. Chinese firms also lagged behind in battery technology, while further pollution was generated by the electricity production needed to manufacture electric vehicles, Song said.