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PHOTO CAPTION: BYD's Qin electric hybrid does not qualify for government incentives despite its strong electric-drive capability.

Growing Niche for 'New Energy' Cars in China Requires Policy Perseverance

Chinese officials are exploring various policy mechanisms to incentivize both industry and consumers to shift to 'new energy' electric vehicles.

Published: 02-Apr-2014

Vice-Premier Ma Kai said at a recent seminar in Shenzhen that China will create a favorable environment for the development of the renewable energy vehicle industry, highlighting the importance of breaking local protectionism and ensuring fair competition.

China has taken some tentative steps in recent years to develop its new energy vehicle sector. However, despite the enormous input of capital and preferential policies that include a purchase subsidy, homegrown companies are yet to really make a breakthrough in the market. One of the main reasons for that is the market for new energy vehicles is not open and competitive, said a commentary in Economic Daily on Monday.

Among those Chinese cities that have launched a pilot program to promote the use of renewable energy vehicles, some have also formulated protectionist policies to protect local companies.

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Most of the electric-drive vehicles will be battery electric models that will be sold internally.

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