Chinese regulators not to halt gasoline-powered vehicle sales in China market any time soon

According to a reply from the Ministry of Industry and Information Technology to China’s parliament, they are not ready to stop conventional vehicle sales any time soon.  The statement was posted in response to the parliament’s query on a timeframe to end sales of gasoline-powered vehicles. 

The ministry may consider allowing experimental no-go zones for gasoline-powered cars. But it said it won’t rush to a timeframe to ban sales of such vehicles.

Notwithstanding the recent robust sales of electrified vehicles or new-energy vehicles, the ministry is not considering a complete shift towards them.

The ministry states: “While supporting the development of new energy vehicle industry, our country has also placed strong emphasis on the development of energy saving vehicles and insisted on well-concerted development of energy saving and new energy vehicles.”

In China, “energy-saving vehicles” refer to hybrids and fuel-efficient conventional vehicles.

The ministry says it will engage agencies to do a competitive analysis of electrified vehicles and conventional vehicles in terms of technology development costs, fuel economy and market demand.

Among the 31 provinces and other regions in mainland China, only the island province of Hainan in south China has set a 2030 deadline for stopping conventional vehicle sales.  

Among automakers, Changan Automobile Co. and BAIC Motor Co., the two state-owned companies are active in their efforts to phase out conventional vehicles. However, in all practicality, they are not yet ready to completely halt such vehicles.

They are planning to continue with energy-saving vehicles and BAIC said they will continue to build fossil fuel SUVs for military use and other vehicles for special purposes.

China has by far become the largest electrified vehicle market because of various government initiatives like subsidies and other incentives, such as free license plates. In the first seven months of 2019, aggregate sales of EVs and plug-in hybrids surged 41 per cent to reach 700,000. But it is a small number in a market which delivered 14.1 million new vehicles during the same period.

Beijing is set to end the subsidy program for EVs and plug-in hybrids by 2020 after announcing a major subsidy cut in June.

A wise government will not take the risk of barring conventional vehicles from sales in the world’s largest new-vehicle market. Gasoline cars will continue to take a major share of the Chinese  market in the near future.