China Mulls Goal of 60% of Auto Sales to Be Electric by 2035
Target would represent 12-fold jump from about 5% now.
(Bloomberg) -- China is exploring ambitious new plans for the future of its car industry, weighing a target for 60% of all automobiles sold in the country to run on electric motors by 2035, according to people familiar with the matter.
China’s Ministry of Industry and Information Technology is spearheading the government’s latest auto industry plans for 2021 through 2035, said the people, who asked not to be identified discussing matters that haven’t been made public. The proposals are still under discussion and subject to change, according to the people. The ministry said in July that it plans to disclose a draft of the targets by the end of the year.
China’s last roadmap on the auto industry was announced in 2017, when the government said new energy vehicles -- all-electric, fuel-celled autos and plugin hybrids -- would account for more than 20% of the country’s total vehicle sales by 2025. Under the latest proposal, the NEV target for 2030 is 40%, according to one of the people, as the country looks to lead the world in the push away away from combustion engines.
China’s industry ministry said the plans are being made and related content studied, without elaborating.
The 2035 target would represent a 12-fold jump in the proportion of NEVs sold now, which stands at about 5%, and adds pressure for global carmakers to electrify their fleets to compete in the world’s largest car market. China typically sets national-level goals for high-priority industries to help guide Beijing in setting measures such as subsidies and tax breaks.
Though exact comparisons weren’t immediately available, BloombergNEF estimates that NEVs -- excluding commercial vehicles -- will account for 56% of total passenger vehicles in China by 2035.
The move could help allay growing concerns that China’s commitment to electric cars is wavering for a burgeoning industry that’s still heavily reliant on government support. The government has been gradually scaling back subsidies since 2017 -- most recently in June -- which have undermined industry growth and prompted the likes of top Chinese EV maker BYD Co. to warn last month that earnings will wane because of slowing demand. BYD shares rose 2.4% in Hong Kong.
Given China’s scale -- about half of the world’s electric cars are sold there -- any slump is likely to ripple beyond its shores. In July, global electric-car sales fell for the first time on record because of China, according to Sanford C. Bernstein.
China said last month it is working on setting up a timetable for the country to phase out sales of fossil-fueled cars.
To contact Bloomberg News staff for this story: Tian Ying in Beijing at ytian@bloomberg.net;Steven Yang in Beijing at kyang74@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Ville Heiskanen
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With assistance from Bloomberg