China may reopen the production license of electric vehicles, and the electric vehicle market is expected to resume
On November 14, reports indicated that the Chinese government is considering resuming the approval of electric vehicle production licenses. This move could open doors for global players like Ford and Tesla, as well as local manufacturers, to expand their presence in the EV market. The National Development and Reform Commission (NDRC) has been reviewing the issue of overcapacity in the sector. It is expected that the licensing process may restart as early as the first half of next year.
Earlier this year, the NDRC suspended the issuance of new licenses to curb excessive production capacity. Currently, it is estimated that more than 2 million new energy vehicles are added to the market annually, prompting regulators to reassess the industry's growth. While the NDRC hasn’t officially commented on the potential reopening, it has stated that it is revising the existing licensing framework with the aim of raising entry barriers for new players.
Since March 2016, China has issued 15 electric vehicle manufacturing licenses. Companies like Wanxiang Group and joint ventures involving Volkswagen have been among the recipients, fostering greater competition within the automotive sector. In recent years, tech companies such as smart TV and air conditioner manufacturers have also shown interest in entering the new energy vehicle industry.
Foreign automakers, including Ford and Tesla, are preparing to enter the Chinese EV market to meet stricter local emissions and fuel efficiency standards. Ford’s joint venture with Anhui Zhongtai plans to build a factory capable of producing 100,000 electric passenger vehicles annually. Meanwhile, Tesla has reportedly reached a preliminary agreement with the Shanghai government for local production. CEO Elon Musk recently mentioned that the company is three years away from starting production in China.
The licensing system remains a key tool for the Chinese government to regulate the world’s largest new energy vehicle market. Last week, the government announced pilot programs allowing foreign automakers to establish wholly-owned electric vehicle factories in free trade zones by June 2024. Starting in 2019, most automakers will be required to meet new energy vehicle quotas, or face penalties if they fail to comply.
With strong national support, China overtook the U.S. in 2015 to become the world’s largest new energy vehicle market, encompassing electric, plug-in hybrid, and fuel cell vehicles. According to the China Association of Automobile Manufacturers, nearly 507,000 new energy vehicles were sold nationwide last year. The country has also halted the expansion of traditional gasoline vehicle production, aiming to boost annual new energy vehicle sales to 2 million by 2020.We started to export 10kV Transmission Line Steel Pole to Philippines from 2004 and supply more than 50,000 pcs each year.
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