China is planning to invest 100 billion yuan ($16 billion) to build more EV charging facilities and intensify demand for electric vehicles.
The policy will be announced soon and the increased state funding is expected to encourage carmakers handling consumer concerns over the price and convenience of electric vehicles.
China, the highest carbon emitting country is cheering up their efforts to fight against pollution by boosting up an EV industry, which includes firms like BYD and Kandi Technologies.
Charging infrastructure and EV growth is a chicken-and- egg situation. It’s got to be a gradual process to scale up both EV sales as well as charging infrastructure. EVs are still not very attractive when compared with conventional-powered cars, said Ashvin Chotai, managing director, researcher, Intelligence Automotive Asia.
In a recent initiative, China will exempt electric cars, plug-in hybrids and fuel-cell vehicle from a purchase tax from next month, and has ordered government departments to buy such vehicles for their official fleets.
Supporting a strategic and emerging industry like new- energy vehicles is a win-win for industrial development and environmental protection, announced Government sources.
Developing new-energy autos is important for spurring innovation, promoting energy savings and reductions in emissions, and will help to drive domestic demand and nurture new avenues of growth, added the Government bulletin.
In addition, the government is considering allowing non-carmakers to manufacture EVs to substitute more competition, said, China Automotive Technology and Research Center, which helped draft the new initiative.
That would pave the way for the likes of Wanxiang, the Chinese auto-parts maker that owns Fisker Automotive, to build electric cars in the country.
While sales of EVs in China have lagged behind targets, BYD, has cited favorable government policies for helping the company’s new-energy vehicle sales to jump six-fold during the first half.
Besides, BMW has plans to sell its electric i3 city car in China this year. They predict that China will become the world’s largest market for EVs in five years.
Denza, the joint electric car brand between BYD and Daimler will begin sales next month in Beijing.
Last month, China has set a target for EVs to make up at least 30 percent of government vehicle purchases by 2016. The ratio will be raised beyond 2016, when local provinces are required to meet the target.