China to Ban Gas and Diesel Car Sales to Spur EVs

Electric vehicles (EVs) have a bright future in the world's most populous nation and largest auto market, unlike those powered by oil. That was a ministry chief's message at an auto forum on Saturday.

2 minute read

September 13, 2017, 7:00 AM PDT

By Irvin Dawid


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China has yet to set a date for the ban, but it wanted to send a message to auto manufacturers that there's no future in sticking with petroleum-powered motor vehicles. China's plan would also ban the domestic production of oil-fueled vehicles.

"Xin Guobin, the vice minister of industry and information technology, said the government is working with other regulators on a timetable to end production and sales," reports Bloomberg News. "The move will have a profound impact on the environment and growth of China's auto industry, Xin said at an auto forum in Tianjin on [Sept. 9]."

A ban on combustion-engine vehicles will help push both local and global automakers to shift toward electric vehicles, a carrot-and-stick approach that could boost sales of energy-efficient cars and trucks and reduce air pollution while serving the strategic goal of cutting oil imports.

Cap-and-trade

Currently, China "offers generous subsidies to makers of new-energy vehicles. It also plans to require automakers to earn enough credits or buy them from competitors with a surplus under a new cap-and-trade program for fuel economy and emissions."

A report for Reuters indicates that the Chinese government is "studying" the ban, which would correspond with bans in several other countries (see below). China has already "set goals for electric and plug-in hybrid cars to make up at least a fifth of Chinese auto sales by 2025," write Tony Munroe and Yawen Chen.

Oil consumption increasing

In addition to reducing air pollution and carbon emissions, which China promised to cap by 2030 according to the Paris climate accord, the ban intends to curb rising oil consumption.

Last month, state oil major China National Petroleum Corp said China's energy demand will peak by 2040, later than the previous forecast of 2035, as transportation fuel consumption rises through the middle of the century.

International movement to ban ICEs

The international movement away from vehicles with international combustion engines has already been set in motion by Great Britain, France, India, Norway, Netherlands, and auto manufacturer Volvo, which was acquired in 2010 by Geely Holding Group, a Chinese multinational auto manufacturing company.

China is not only the world's largest auto market. It also accounts for 40 percent of global demand for electric and hybrid vehicles, according to Joe McDonald in a report on the proposed ban. In 2016, EV sales in China totaled 336,000, compared to 159,620 in the U.S.

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