China

Vehicle policies

The NEV credit mandate went into effect in 2018, setting a minimum production requirement for the car manufacturing industry, which is a central pillar of China’s policy to promote EVs. It sets a minimum requirement for the production of NEVs (PHEVs, BEVs and FCEVs), with some flexibility offered through a credit trading mechanism that privileges BEVs with larger ranges and higher energy efficiency (and FCEVs with higher power ratings) (IEA, 2018a).

A fuel economy standard for light-duty vehicles has been in place in China since 2005. Phase IV, which took effect in January 2016, set a target for a new sales fleet average specific fuel consumption of 5 litres per 100 kilometres (L/100 km) by 2020 (based on the New European Driving Cycle [NEDC]) (TransportPolicy, 2019). A new standard for passenger cars of 4 L/100 km (NEDC) for 2025 was proposed in January 2019 and released for comment (Government of China, 2019a). Light-commercial vehicles (LCVs) are subject to standards that differ both in terms of target value and compliance structure; individual LCV models are subject to specific fuel consumption targets (TransportPolicy, 2019).

In February 2019, the State Administration of Market Supervision and the National Standardization Administration Committee announced a national voluntary standard for “energy consumption rate limits for electric vehicles” (Government of China, 2019b; China Standardization Administration, 2018). This is the world’s first technical standard for specific energy consumption for BEVs. The voluntary standard sets maximum energy consumption requirements in kilowatt-hours per 100 kilometres (kWh/100 km) for 16 weight classes for vehicles up to 2 510 kilogrammes (kg). There are two phases, where phase 2 is a tightening of the recommended phase 1 standard. The first phase will be implemented 1 July 2019 and is based on existing passenger models that entered the Chinese market in 2019. The second phase is recommended for implementation in 2020. All models in 2019 already meet the phase 1 limit and 80% of the models meet the phase 2 limits (Sohu, 2019).

Charging infrastructure policies

China plans to deploy 12 00 stations to swap batteries, 4.3 million private EVSE outlets and 500 000 publicly accessible chargers to serve 5 million EVs11 by 2020, and it intends to differentiate its target geographically to address asymmetrical development within its electric car market (IEA, 2018a). China is among the major global economies that ramped up their ambition to install fast charging facilities along highways (IEA, 2018a). The national government has urged local authorities to eliminate subsidies that support EV purchases to instead focus on charging infrastructure, emphasising the importance to align infrastructure investments with EV uptake (China Daily, 2019). More than 30 cities in China now offer incentives for private home or public charging (Hove, 2019). State Grid Corporation of China and China Southern Power Grid continue to roll out charging infrastructure to meet their 2020 targets of 120 000 and 25 000 chargers respectively (Teamwork Global Group, 2018; Government of China, 2016; State Grid EV Service, 2018). The State Grid Corporation of China reached more than 6 000 charging stations with more than 57 000 charging points along 31 000 km of highway (around 25% of all highways), whereas China Southern Power Grid added another 10% to that number (State Grid EV Service, 2018; Xinhua, 2018a).

Industrial policies

Alongside stimulating consumer demand for EVs, China has made the development of the NEV industry a top priority. Over the past years, China has employed an intensive effort, led by the government, to build a full supply chain of domestic NEV production, from the assembly of the vehicles to the production of batteries and key vehicle components. The 2018 NEV credit mandate is an important tool supporting this development. It includes differentiated incentives for vehicles based on their battery characteristics. It aims to stimulate innovation and the capacity to induce consolidation among battery manufacturers, giving increased relevance to those capable of deploying the technologies offering the best performance.

China also has a national New Energy Vehicle Subsidy Program, updated each year, which supports the adoption of EVs. The level of subsidy allocated though this programme, which depends on three characteristics (vehicle range, energy efficiency and battery pack energy density) is intended to stimulate innovation and induce consolidation in the battery manufacturing industry. A programme amendment in February 2018 lowered the subsidy level for PHEVs and low-range BEVs (<300 km) and increased the levels for long-range BEVs (>300 km) (IEA, 2018a). In April 2019, the government announced modification that go in the same direction. Starting in late June 2019, the overall amount of subsidies available to the car industry will be scaled back and subsides will focus on the battery electric cars with the best performance. The subsidy for battery electric cars with driving ranges of 400 km and above will be cut by half to RMB 25 000 (USD 3 700) per vehicle, and electric cars need to have a range of at least 250 km compared with 150 km previously to qualify for any subsidy (Bloomberg, 2019a; Government of China, 2019c). For commercial vehicles, a mileage requirement is also a prerequisite for receiving a subsidy. A portion of the subsidy will be paid at the vehicle sale/purchase, but the full subsidy amount can only be claimed if the vehicle reaches a mileage of 20 000 km within two years (Government of China, 2019c). Overall, subsidies on purchases of EVs, including buses and trucks will be scaled back in stages. Some