China halts new EV production permits, sources say
China plans to stop issuing new production permits for electric vehicles pending a review of the policy designed to encourage innovation, according to people familiar with the matter.
The National Development and Reform Commission, which oversees new investments in the auto industry, wants to evaluate the program after handing out 15 production licenses over the past year, the sources said.
The commission didn't immediately respond to a request for comment.
China has identified EVs as a strategic emerging industry and aims to boost annual sales of plug-in hybrids and EVs by tenfold in the next decade.
In addition to generous sales subsidies for EVs, the government created a class of permits that allowed companies to produce only EVs, while imposing a moratorium on new capacity for conventional gasoline-powered vehicles.
In 2015, China surpassed the United States to become the world¡¯s biggest market for EVs and plug-in hybrids. Last year, 507,000 such vehicles were sold in the country, according to the China Association of Automobile Manufacturers.
A suspension of new permits may delay plans by companies such as Internet entrepreneur William Li's NIO and Jia Yueting-backed LeEco's electric-car unit that have said they intend to apply. But it may help incumbent electric-car manufacturers including BYD Co. and BAIC Motor Corp. by limiting the number of new entrants to the industry.
Volkswagen AG's joint venture with Anhui Jianghuai Automobile Group Corp. received the 15th license to produce EVs.
To date, startups in China have announced at least 98 billion yuan of investments to build EV assembly plants with a total annual capacity of 2.9 million units a year. That is six times the number of plug-ins sold last year, according to data compiled by Bloomberg.
Chinese Premier Li Keqiang last week said the country will stick to its pledges to tackle global warming. President Donald Trump said he would pull the U.S. from the Paris climate pact because it favored other nations, a move seen as an opening for China to burnish its image as a global leader on environment issues.
The commission didn't immediately respond to a request for comment.
China has identified EVs as a strategic emerging industry and aims to boost annual sales of plug-in hybrids and EVs by tenfold in the next decade.
In addition to generous sales subsidies for EVs, the government created a class of permits that allowed companies to produce only EVs, while imposing a moratorium on new capacity for conventional gasoline-powered vehicles.
In 2015, China surpassed the United States to become the world¡¯s biggest market for EVs and plug-in hybrids. Last year, 507,000 such vehicles were sold in the country, according to the China Association of Automobile Manufacturers.
A suspension of new permits may delay plans by companies such as Internet entrepreneur William Li's NIO and Jia Yueting-backed LeEco's electric-car unit that have said they intend to apply. But it may help incumbent electric-car manufacturers including BYD Co. and BAIC Motor Corp. by limiting the number of new entrants to the industry.
Volkswagen AG's joint venture with Anhui Jianghuai Automobile Group Corp. received the 15th license to produce EVs.
To date, startups in China have announced at least 98 billion yuan of investments to build EV assembly plants with a total annual capacity of 2.9 million units a year. That is six times the number of plug-ins sold last year, according to data compiled by Bloomberg.
Chinese Premier Li Keqiang last week said the country will stick to its pledges to tackle global warming. President Donald Trump said he would pull the U.S. from the Paris climate pact because it favored other nations, a move seen as an opening for China to burnish its image as a global leader on environment issues.
