The Asian country, which a few years ago didn’t even recognize it had a pollution issue, is now scrambling to battle its effects, with many moves targeting the thriving automotive industry.
The central government has embarked in a “war” to fight off pollution, as the world’s second largest economy has turned into a greenhouse effect monster – with many cities posing serious health threats during periods of heavy pollution. Some of them moved to impose caps on the new car sales, as the government wants to scrap many of the older cars off the roads. Now, the latest measure is to have more than 30% of the government cars acquired by 2016 from the so called new energy segment pool of cars. That means plug-in hybrids, battery electric vehicles and fuel cell cars.
“This is a laudable aspiration,” said Yang Song, a Hong Kong-based analyst at Barclays Plc. “Government purchases are not growing as fast as private consumption. So just to rely on the government purchase would be a challenge.”
The analysts estimate that only 10% of the new car sales in China are Government purchases, which is why the lawmakers are actively encouraging the private ownership of new energy cars. Just last week, China officially revealed it wants to exclude the segment from the 10 % purchase tax, a move set to last until the beginning of 2018.