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24th Jun 2018

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European car industry: China's electric quotas 'challenging'

  • Electric vehicle in Estonia (Photo: Peter Teffer)

The European car industry thinks it will be "challenging" to meet China's new electric vehicle quota, a spokeswoman for the European Automobile Manufacturers' Association (Acea) told EUobserver.

Last week, China's ministry of industry and information technology announced that carmakers that sell over 30,000 vehicles a year must have 10 percent electric vehicles in their fleet, or buy credits.

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The quota potentially provides an impetus for European carmakers to incentivise producing electric cars, something which the EU itself does not obligate via any quota regime.

Acea's spokeswoman estimated that all its members – including BMW, Daimler, Fiat, Ford, Peugeot, Toyota, Volkswagen, and Volvo – each sell more than 30,000 vehicles in China annually.

According to data from analysis company IHS, Germany's Volkswagen sold almost 4 million cars in China last year, French car company group PSA and German company Audi each sold more than 600,000, while another German carmaker, BMW, sold just over 500,000 cars on the Chinese market.

In order to remain competitive in China, the new quota will likely force carmakers to think about shifting their focus. In particular German carmakers have in the past decade focused on developing diesel technology instead of electric vehicles.

The Chinese ministry said in a statement on its website that these carmakers have to fulfil the following requirement by 2019: 10 percent of the sold cars must be plug-in hybrid or electric vehicles, or the company should buy credits.

By 2020, the share of hybrid of electric should be 12 percent.

Acea's spokeswoman said that "meeting the 2019-2020 targets will be challenging, with the situation being different for each company. It will also be dependent on the demand-side policies".

She noted a key difference between the EU and China.

"In China, it is basically the same entity that both regulates and incentivises the market," Acea said.

"On one hand, the government is responsible for setting the rules and the targets that manufacturers need to comply with.

"On the other hand, it is also responsible for setting the framework conditions that will allow for a stronger market uptake of low emissions vehicles, such as monetary and non-monetary incentives and large-scale infrastructure deployment.

"Effectively, both carrot and stick are controlled by one single player, who is able to adjust and coordinate policies."

The car lobby organisation however noted that in Europe the deployment of infrastructure for electric vehicles, incentives and "consumer education" is the responsibility of 28 national governments, not of the European Commission.

For this reason, Acea is against an EU-wide quota for electric vehicles.

No quotas in the EU

The EU is currently not considering such a quota for electric vehicles. It is preparing a proposal with new rules to reduce CO2 emissions from cars, which are expected to be published in November.

At a press conference in August, commission spokeswoman Mina Andreeva firmly excluded quotas for electric vehicles.

"We do not discriminate between different technologies," said Andreeva.

"Whatever we are working on, it will never target or promote one specific technology at the expense of others. We are talking about low-emission energy, so no quotas for electric cars are being considered or worked on," she said.

According to Acea's most recent market report, 1.2 percent of all cars sold in the EU in the first half of 2017 were electrically‐chargeable vehicles.

While that figure is still small, it is growing. Compared to a year earlier, it was 37.7 percent higher.

According to Eurostat, in 2016 a total of 1,699 electric vehicles were exported to China, up from 498 in 2015.

Analysis

EU transport sector has a CO2 problem

Although car manufacturers are reaching their CO2 targets for their fleets, car usage has gone up in Germany, while the gap between lab results and actual fuel consumption has increased.

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Cars that run on petrol or diesel are meant to be a rarity by the year 2050. Progress is slow. But some Nordic cities have radical visions of how a "Hyperloop" could change that.

New Commission CO2 rules for cars include some 'leeway'

Cars should emit 30 percent less CO2 by 2030, the Commission proposed, but carmakers will be allowed to miss that target (up to a point) if they manufacture a certain share of low emission vehicles.

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