Implementation of Electric Car Quota in China Remains Unclear

Despite recent talks by the Government of Germany with China requesting a delay of the electric car quota in China for another year, the most recent law draft still states that the quota will take effect in 2018. German car manufacturers BMW, Mercedes and Volkswagen, have all stated that they will face difficulties in meeting the quota set.

The most recent draft of the law still states that from 2018 the manufacturers will have to meet an 8 percent sales rate of electric or hybrid cars which will be tracked via a point system. Failure to do so may result in penalties. In 2019 the sales must meet 10 percent and then in 2020 12 percent. If a manufacturer does not meet the requirement, points must be purchased from other manufacturers who are exceeding their quota. Pure electric drive vehicles get a higher point values than plug-in hybrids with a mix of combustion and electric motors. The distance that an electric car can travel on a full charge is also taken in account with longer range vehicles getting a higher point value.

Although the legislative process is mostly not subject to public debate, lobby groups were able to submit statements on behalf of the manufacturers until June 29, 2017. It is important to note that Chinese car manufacturers will also be held to the same quota rules, which will affect their business as well.

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