CRU: New Year Present for OEMs - China Relaxes EV Battery Requirements

LONDON, Jan 8, 2019 /PRNewswire/ --

The EV revolution represents a number of significant opportunities for China, and the Chinese government has been keen to stimulate domestic EV production as a result. But while other countries are using incentives and subsidies to encourage the improvement of battery technologies, China gave indications that it would instead use highly punitive measures to encourage manufacturers to improve their energy densities over the coming years. An announcement this week suggests that this may no longer be the case.

The growth of the e-mobility sector represents a huge opportunity to the Chinese government

The growth in EV usage in China will have a number of far-reaching effects on the country.

• Reduced smog in cities. China has been battling with dangerous levels of smog and pollution across many major cities. Growth in adoption of EVs would reduce tailpipe emissions, leading to reduced pollution.
  
• Growth in domestic vehicle sales. The Chinese vehicle market has historically been dominated by foreign brands like GM, Ford, VW Group, Toyota and Daimler which operate manufacturing plants in the country. While there have historically been a small number of Chinese-owned OEMs, they have never had a substantial market share. The EV revolution is an opportunity for China to build its fledgling auto industry, as EVs are typically cheaper and easier to make than traditional internal combustion engine (ICE) vehicles.
  
• The potential for an export market. If China can ramp up scale of good quality, high-performance EVs fast enough then it could outpace the plans of foreign OEMs and potentially export vehicles into other regions. This would be a new market opportunity for the country.

As a result, the Chinese government has been keen to encourage EV production through a combination of measures.

While other countries use carrots, China uses a stick

Like other countries, China offers generous subsidies to EV consumers. When considering subsidies offered at a government and a local level, these equate to around $10,000 per vehicle currently – though China does intend to reduce this in the coming years.

Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2019/new-year-present-for-oems-china-relaxes-ev-battery-requirements/

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CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 260 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004.

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