China has joined both France and the U.K. in the quest to completely do away with the sale of combustible-engine vehicles. Without a specific date locked in as to when it would stop sales, the world’s largest automaker (28.03 million vehicles sold last year) is focused on cleaning up its environment by welcoming zero-emissions electric vehicle manufacturers into its country. It’s even offering incentives for partnerships with its top electric automakers BYD Co. and BAIC Motor Group.

China’s Zero Emission Strategy

China fossil fuel ban

China has implemented an open-door policy for foreign manufacturers interested in joint ventures with local automakers. The only requirement: the automaker must be entirely dedicated to making electric vehicles. That means no production of future gasoline or diesel-made vehicles. With a joint venture between Guangxi Honda Automobile Co. and Dongfeng Honda Automobile Co. already underway, China’s EV market is already beginning to take form. Nissan in unveiling its all-new Leaf EV to China’s automobile marketplace in 2018/2019.

China’s plan to phase out gasoline and diesel engines is strategic – one that has a major impact on international automobile markets. From subsidies for OEM’s to only doing business with automakers exclusively making EV’s, regulators in China seems to be dead set on reducing carbon emissions across their country. With a promise to “cap its carbon emissions by 2030 and curb worsening air pollution,” China joins both France and the U.K who vowed, this past July, to “stop selling fossil fuel cars by the year 2040.” Volvo, in a surprising announcement, has decided to sell all-electric or hybrid vehicles exclusively – making them an attractive manufacturer for automakers in China.

Foreign EV Automakers Welcome in China

China fossil fuel ban

With Tesla, Chevrolet, and Honda all planning entry into China’s automobile marketplace over the next few years, it appears that the leading producer of automobiles will not be starving for EV options. It will certainly give foreign EV makers a chance to penetrate a bustling marketplace where regulation stand to be in their favor perpetually. Xin Guobin, the vice minister of industry and information technology, said at an auto forum in Tianjin, “the move will have a profound impact on the environment and growth of China’s auto industry.”

China is officially the “biggest market to end sales of fossil-fuel-powered vehicles.” The zero-emission movement will have a ripple effect across the globe. If foreign automakers didn’t have an electric vehicle production plan of attack, they certainly do now. “The implementation of the ban for such a big market like China can be later than 2040,” said Liu Zhiija, an assistant general manager at Chevy Automobile Co., the country’s biggest passenger car exporter that unveiled a new line of upscale battery-powered and plug in hybrid models at the Frankfurt Motor Show. “This will leave plenty of time for everyone to prepare.”

China’s Domestic EV Market

China fossil fuel ban

As it stands right now, China’s electric vehicle market is starting to gain some serious momentum. Backed by Warren Buffet, BYD Co. has already delivered close to 50,000 electric and hybrid models in the first seven months of 2017, according to the China Passenger Car Association. Beijing Electric Vehicle, the EV division of state-owned BAIC Motor, is a close second with 36,084 models sold in the first seven months.

There are certainly enough industry critics that think China’s strict regulations on combustible engine vehicles and their manufacturers is not feasible, especially considering China’s vast influence on the market. They argue that the availability of lithium needed to power the sudden influx of electric vehicle batteries is not sustainable. Tesla, in the process of building its lithium ion Gigafactory, may have something to say about that.

Source: TechCrunch, Bloomberg