China to Allow Non- Carmakers to Manufacture Electric Vehicles?

Published By : 26 Jun 2014 | Published By : QYRESEARCH

China, a country battling with notorious level of air pollution, is considering a move that will allow companies that are not classified as car makers to manufacture electric vehicles. This recommendation, passed by the China Automotive Technology and Research Center, is still at the draft stage of the country’s automotive policy. As part of this plan, special licenses could be issued to companies that have the capabilities for electric vehicle manufacturing, said Wang Cheng, an official in charge of the project.

Further discussions on this proposal are likely to be held after the recommendations are circulated among regulators in the Chinese automobile industry. The final recommendations will then be submitted to the State Council for approval. The recommendations and policy changes could be finalized by the end of this year.

If such changes were to be brought into effect, it would mean that automotive component manufacturers – such as the Wanxiang Group Corp. – could foray into EV manufacturing. However, this could also pose a challenge to giants such as Tesla Motors Inc. (TSLA) and BYD Co. China hopes that by promoting electric vehicles, it will be able to address pressing issues such as a high dependence on fuel imports and unhealthy air pollution levels. Thus far, electric vehicle sales haven’t met the targets set by the government.

Currently, China is making an effort to consolidate its automotive industry, and this has made licenses hard to come by. But, if the new licensing regulations come into force, it could provide a much-awaited chance to new players to enter the electric vehicle manufacturing market.
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