Stable policy needed for smart electric vehicle sector, say executives

Chinese officials and auto executives are calling for stable policies in the post-subsidy era to ensure the growth of the smart electric vehicle sector in the world's largest vehicle market.

Wan Gang, vice-chairman of the National Committee of the Chinese People's Political Consultative Conference, said authorities should speed up their efforts to draft new policies that further boost the sector's development.

Wan, also president of the China Association for Science and Technology, made his remarks in a video message at the China Auto Forum held in Shanghai held from July 17-19.

China began offering subsidies on new energy vehicles in 2009, but the government is phasing out the stimulus and will stop it altogether starting in 2023.

Wan suggested that authorities should continue the exemption of purchase tax on electric cars and plug-in hybrids, offer financial support for the adoption of clean-energy vehicles in public transportation, and help fund charging infrastructure.

At the same forum, GAC Group Chairman Zeng Qinghong said steady and stable policies are vital for carmakers.

It takes three to four years and a huge amount of investment to develop new models, so carmakers must plan their work in advance. Since it's difficult for carmakers to adjust their work if the policies are updated frequently.

FAW Group Vice-president Liu Yigong and Dongfeng Motor Vice-president You Zheng said the government should work out an emissions-cutting roadmap for the auto industry that allows them to better plan their work and contribute to the country's decarbonization goals.

The sector is gaining momentum in the country. China has been the world's largest market for new energy vehicles since it overtook the United States in 2015.

Statistics show that there are 5.8 million electric cars and plug-in hybrids on Chinese roads, accounting for around 50 percent of the global total.

Fu Bingfeng, executive vice-president of the China Association of Automobile Manufacturers, said China's new energy vehicle market will grow at 40 percent year-on-year for at least the next five years.

He estimated that such vehicles will account for 20 percent of new vehicle sales in 2025. The figure was 8.7 percent in the first five months this year, and 5.4 percent last year.

Guo Shouxin, an official at the Ministry of Industry and Information Technology, said China's auto industry is expected to see faster development during the 14th Five-year Plan (2021-25) period.

"The trend of the Chinese auto industry's positive development in the long run will not change, and our determination to develop smart electric cars will not change either," Guo said.

Wang Jun, president of Changan Auto, said the Chongqing-based carmaker will roll out 26 electric cars in five years.

He said it is important for vehicles to be both electric and smart, predicting that the vehicles will become mobile cabins where passengers can work and play.

"So only those who excel in software, service and smart manufacturing can be the top players in the auto industry's future," Wang said. He said Changan has started its transformation from a carmaker into "a smart low-carbon mobility technology company".

Statistics from the China Association of Automobile Manufacturers show that sales of passenger vehicles with Level 2 autonomous functions exceeded 3 million units in 2020, up 107 percent year-on-year.

Zeng at GAC called for the establishment of a national data center for carmakers, as the sector continues to pick up speed.

"Data is food for smart cars, and every carmaker is working hard to collect and store data such as roads and mapping information. But that is beyond the ability of any carmaker," Zeng said. "It'd be reasonable for the country to establish such a center when carmakers can upload their data and share with others," Zeng said. "This helps us and prevents repetition."