Chinese Government Focused on Strengthening its Automotive Sector

The Chinese government has unveiled a comprehensive work plan aimed at ensuring consistent growth in its automotive industry, particularly in the realm of new energy vehicles (NEVs), throughout the 2023-24 period. This ambitious strategy, jointly released by seven government ministries on September 1, entails various measures to strengthen the sector's development.

China has set its sights on achieving a 3% increase in automotive sales from the previous year, targeting a total of 27 million units in 2023. Concurrently, the country is aiming for NEV sales to surge by approximately 30% year-on-year, reaching a significant milestone of 9 million units. While specific targets for 2024 were not provided, the government emphasizes maintaining a rational pace of development and enhancing the industry's overall quality and efficiency.

To realize these objectives, China will expedite the adoption of NEVs by effectively implementing favorable tax policies for vehicle purchases and usage. Additionally, NEVs will be integrated into various public sectors like urban transportation, taxis, sanitation, and logistics, further propelling their adoption. Efforts to popularize NEVs in rural areas and accelerate infrastructure development, especially battery charging points and exchange stations, will remain a priority.

Impressive progress has already been made in the NEV sector, with China's NEV battery charging devices reaching 6.928 million units by July's end, marking a remarkable 74% increase from the previous year. Notably, the power volume charged by NEVs during January-July surged nearly twofold compared to the entirety of 2022, reaching 441 million kWh, as per data from China's national energy commission.

In parallel, China intends to stimulate consumption of internal combustion engine vehicles over the next two years, underlining a ban on imposing new vehicle sales restrictions. Efforts will be made to encourage regions with existing sales restriction policies to raise vehicle sales and purchase quotas beyond the 2022 levels. Furthermore, China plans to boost vehicle exports, particularly to countries participating in the "one belt, one road" initiative and other emerging markets, while also promoting the replacement and consumption of used cars.

Amid these endeavors, China's automotive sector has demonstrated resilience. Total automotive sales witnessed a 7.9% increase year-on-year, totaling 15.62 million units during January-July, with NEV sales achieving an impressive 42% growth during the same period, reaching 4.526 million units. While Beijing's decision to remove EV subsidies led to a revised growth projection of 30% for NEV sales in 2023 (9 million units), compared to the remarkable 93% rise recorded in 2022 (6.89 million units), the ongoing commitment to fostering innovation and sustainable mobility remains evident in China's automotive strategy.

According to the article by Procurement Resource, China's government has unveiled a comprehensive plan to ensure consistent growth in its automotive industry, focusing on new energy vehicles (NEVs) for 2023-24. The strategy aims for a 3% increase in automotive sales to 27 million units and a 30% rise in NEV sales to 9 million units in 2023. To achieve this, China will accelerate NEV adoption through tax incentives, public sector integration, rural promotion, and infrastructure development. Notable NEV progress includes a 74% YoY increase in charging devices and a doubling of power volumes charged. The plan also stimulates combustion engine vehicle consumption and boosts exports to emerging markets, highlighting the sector's resilience and innovation.