While the country has not yet decided when the ban would come into force, China’s vice industry minister said it had started “relevant research.” Speaking to China’s official news agency, Xinhua, Xin Guobin said, “Those measures will certainly bring profound changes for our car industry’s development.”
In 2016, China made 28 million cars, which was almost a third of the global total. Recently, the Chinese-owned carmaker, Volvo said in July that all its new car models would have an electric motor from 2019. Further, Geely, Volvo’s Chinese owner has announced that it is aiming to sell one million electric cars by 2025.
Even other global car firms including Renault-Nissan, Ford and General Motors are working to develop electric cars in China.
Previously, the U.K. and France announced plans to ban new diesel and petrol vehicles by 2040.
Speaking at the an auto industry event in the city of Tianjin, the vice minister of the Ministry of Industry and Information Technology said, “Some countries have made a timeline for when to stop the production and sales of traditional fuel cars. The ministry has also started relevant research and will make such a timeline with relevant departments. Those measures will certainly bring profound changes for our car industry’s development.”
Automakers from across the world are jostling to get a slice of the growing Chinese market, before it introduces new rules designed to fight pollution. By 2025, China is hoping that at least one-fifth of its vehicle sales come from electric battery cars and plug-in hybrids.
However, the proposals would require 8 percent of automakers’ sales to be battery electric or plug-in hybrids by next year – and by 2020, this would have to rise to 12 percent. The vice industry minister Guobin predicted that such a change would create “turbulent times” in the industry.
Further, the shift is predicted to have a knock-on effect on oil demand in China, which is currently the world’s second-largest oil consumer following the U.S. In August, state oil major China National Petroleum Corp (CNPC) said China’s energy demand will peak by 2040, later than the previous forecast of 2035.
On Saturday, Guobin called on the country’s car makers to adapt to the challenge and adjust their strategies accordingly. Meanwhile, Song Qiuling, a senior finance ministry official was quoted as saying in a Xinhua report that government subsidies, intended for jump-starting the new energy auto industry, could easily be abused if held long-term and led to “mindless expansion” and excess capacity in the sector.
Qiuling said China would gradually withdraw such financial subsidies for the sector, and instead speed up the establishment of a credits accumulation policy to support the industry.