New Energy Vehicle Wave

New Energy Vehicles
China’s New Energy Vehicles (NEV) market is booming. According to a report from the China Passenger Car Association, China led global NEV sales in the first 5 months of this year with a 47% of the global market share. NEV sales are expected to grow more than 40% each year in the next five years.

As we’ve seen recently, China’s government is increasingly focused on implementing supportive policies for R&D across the board. This of course explicitly includes the manufacture and marketing of NEV’s. Ancillary to that, more and more overseas companies in the industry are beginning to take root in China. This article will provide a bit more background information on what is happening in the industry in China.

China’s stated intention to become carbon-neutral by 2060 includes by necessity a concerted effort to transform the domestic auto market into a greener one.

In recent years, the Chinese government has unveiled more than 60 supportive policies and measures to enhance the development of the NEV industry and encourage people to purchase clean, low/zero emission vehicles. NEVs, in fact, are on the list of “strategic emerging industries” of the 14th Five Year Plan, and are highlighted in many 14th Five Year Plans of cities like Beijing, Shanghai, and Guangzhou.

The intention is clear, even going back almost a decade to 2012, when the State Council issued the “Development Plan for Energy-saving and New Energy Automotive Industry”. To further implement this Development Plan, the State Council issued the “Guiding Opinions on Accelerating the Popularization and Application of NEVs” in 2014.

Other examples of guiding documents include the “Circular of State Council Auto Industry Adjustment and Recovery Plan” (2009) and the “Guidelines on Applying for Key Projects of NEVs in 2021 (Draft for Comments)”, which sets out technologies of interest for participation in the Ministry of Science and Technology National Key R&D Program.

Development Plan for the New Energy Vehicle Industry (2021-2035)

Most recently, China issued the “Development Plan for the New Energy Vehicle Industry (2021-2035)”.
According to the document, by 2025, China aims to make technological breakthroughs in electric battery, drivetrain, and vehicle operating systems, while improving safety. Tied to this is the goal that domestic NEV sales should reach 20% of the total sales of new vehicles.

By 2035, China aims to reach a high level of international competitiveness in the automotive market, leaning heavily on NEVs, including pure electric personal vehicles and pure electric public sector vehicles (busses, government vehicles, etc). Moreover, the plans include developing fully commercialized hydrogen fuel cell vehicles and highly autonomous-driven cars, and their large-scale commercialization and adoption.

With a booming market and preferential policies, the future for the Chinese NEV industry looks promising, creating business opportunities for (foreign) companies in the industry.

The coming years will be a critical period regarding policymaking, not only in terms of the industry’s commercial development, but also in terms of the legal landscape. For example, policies and regulations on road traffic, accident liability, and data usage that meet the requirements of the development of NEVs will certainly be created and improved upon.

Companies in the field should carefully monitor these policy developments to determine how to navigate this rapidly evolving industry. DaWo Law firm will keep you updated on any legal changes. If you have any questions in the meantime, please feel free to reach out to us.