China Prepares Draft Policy to Open Electric Vehicle Production to New Entrants
China’s government is finalising a draft policy to let new carmakers develop and sell electric vehicles, aiming to boost competition and accelerate clean transport adoption.
China’s National Development and Reform Commission (NDRC) is close to completing a draft policy that would allow new entrants to manufacture and market electric vehicles, according to a senior official involved in the process. The move responds to a government mandate to accelerate the adoption of new-energy vehicles and address the country’s severe air pollution.
The draft, expected to be finalised before 2015, would mark a shift from the current regime, which restricts vehicle production to established manufacturers. The proposed changes would allow companies without existing car production licences to enter the electric vehicle (EV) market, provided they meet technical and regulatory standards set by the NDRC.
Wu Wei, an official with the NDRC’s industry planning department, confirmed that the policy is being developed under direct instruction from the State Council. The aim is to encourage innovation and investment in new-energy vehicles, a category that includes battery electric, plug-in hybrid and fuel cell vehicles.
New entrants and industry impact
The policy would open the door for companies such as Wanxiang Group, which acquired US-based Fisker Automotive, to manufacture electric vehicles in China. This could see new competition for established domestic and international brands like BYD and Tesla, both of which already have a presence in the Chinese EV market.
The China Automotive Technology and Research Center, a state-backed research body, has recommended allowing non-traditional carmakers and suppliers to build new-energy vehicles. This reflects a wider government push to broaden the field of participants and stimulate faster development of clean transport technologies.
Policy objectives and context
The government’s focus on new-energy vehicles is part of a broader strategy to reduce urban air pollution and dependence on imported oil. By opening production to new players, officials hope to accelerate the rollout of electric vehicles and make clean transport more accessible. The measure also aims to foster technological innovation by encouraging competition and investment from both domestic and foreign firms.
China’s EV market is already seeing rapid growth, with domestic brands and global companies expanding their offerings. The planned policy could further accelerate this trend by lowering barriers for newcomers and supporting the government’s targets for new-energy vehicle adoption.
Next steps for the draft policy
Once the draft is finalised, it is expected to be reviewed by relevant ministries and submitted for approval. The NDRC has not published detailed technical requirements or a timeline for implementation, but officials have indicated that the policy is a priority for the current legislative cycle.
If enacted, the new rules could reshape the competitive landscape in China’s electric vehicle sector and provide a template for other markets seeking to stimulate clean vehicle production.
