Daily Management Review

China Contemplating Providing More Support For Hybrid Vehicles For The First Time


China Contemplating Providing More Support For Hybrid Vehicles For The First Time
China wants to make it easier for automakers to meet environment quotas and offer more choice for consumers by re-classification of petrol-electric hybrid vehicles in order to give them more favorable treatment in comparison to all-petrol or all-diesel vehicles as per the regulations for green cars. According to reports, authorities in the country are currently contemplating and assessing the move.
If Chinese authorities do bring in this change in the EV sector, the biggest beneficiaries would be Japan’s Toyota Motor Corp and Honda Motor Co Ltd, both of which are global leaders in hybrid vehicles. Such a change would allow both the companies to concentrate more and make more hybrid vehicles which are much cheaper to manufacture than complete electric vehicles. The draft to this effect was issued by the Chinese Ministry of Industry and Information Technology on Tuesday.
In recent years, China has passed some of the strictest regulation with regards to vehicles that emit green house gases as its policy of reducing pollution levels in some of its cities which are among the highest in the world.
However, the regulations with respect to vehicles emission have forced car makers - both domestic and foreign, to spend billions in developing new technologies and production lines for the so called new-energy vehicles (NEVs) like those that are powered completely by electricity and those that are powered by hydrogen fuel cells and plug-in hybrid vehicles.
According to new regulations that were introduced in China earlier this year, auto makers now have to mandatorily offset a specific portion of the "negative" points that they gather when they manufacture and sell internal combustion engine driven vehicles by manufacturing the NEVs – which give the automakers “positive” points.
According to the current regulations in China, hybrid vehicles, that are far more fuel efficient than the conventional petrol or diesel driven vehicles, are classified in the same bracket as the conventional complete internal combustion engine ones running on fossil fuels. 
The new draft proposal plans to retain the classification of fossil-fuelled vehicles for hybrid vehicles but reclassified as "low fuel consumption passenger vehicles". It also proposes to award significantly less negative points for making hybrid vehicles than the conventional complete fossil fuel driven vehicles. The logic behind in this reclassification is that it would encourage car makers to make more of the hybrid vehicles to replace traditional vehicles, say experts, because that would mean making up for lower number of negative points incurred.
For some experts and industry officials, the proposed change was surprising because no preferential treatment to hybrid vehicles have ever been given by the Chinese authorities. Earlier subsidies were offered for purchasing of all-electric cars.
"The new proposed policy is a roundabout way to promote hybrid cars," Cui Dongshu, secretary general of China Passenger Car Association, wrote in a social media post.
Domestic auto company GAC that has partnerships with Toyota and Honda for manufacturing of hybrid vehicles said that it "keeps close attention to national policies and will actively respond to the promotion and development of relevant policies and standards."