Volkswagen: BUDD-e in China
The proposition of emulating California’s ZEV mandate is now advancing in China.
The Chinese National Development and Reform Commission released a draft proposal, which describes a similar system (over the current incentive driven system) that requires automakers to build a certain percentage of zero or low emission cars...or otherwise buy credits for not doing it.
Fines for not complying with the rules would be around five times higher than credits itself. So it pays to build plug-ins.
The new ZEV mandate supporting New Energy Vehicles (all-electric or plug-in hybrids) is to replace the fixed subsidy; which given that more than 700,000 plug-ins that are expected to be sold in 2016, will shortly become too expensive to maintain.
Similar to California, China will require some portion of EV-only production from automakers of a certain size, some small players will be exempted from the ZEV mandate.
"China surpassed the U.S. as the largest market for electric vehicles last year and wants sales new-energy vehicles to exceed 3 million units a year by 2025. To encourage production and sales of such vehicles, central and local governments have spent 15 billion yuan ($2.3 billion) on subsidies since 2009, according to state-run China Central Television. The government plans to phase out subsidies after 2020."
Ye Shengji, deputy secretary general of the China Association of Automobile Manufacturers, said:
“Without question, this will be good for the industry and will promote the development of all types of clean-energy vehicles,”
Bloomberg, Hat tip to Mark H!