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China is aggressively pushing the new energy vehicle (NEV)
sector as it tries to not only cut air pollution from
traditional combustion engines but also boost China's high-tech
clout.
But experts have warned the sector is facing overcapacity risks,
with as many as 102 firms producing 355 different kinds of
electric, hybrid and fuel cell vehicles by the end of March,
according to industry ministry data.
Meng Wei, spokeswoman with the National Development and Reform
Commission (NDRC), told reporters at a briefing in Beijing that
China will adjust industry entry thresholds, strengthen
corporate responsibility and improve government supervision to
help bring order to the sector.
"At present, new energy vehicle technology is improving very
quickly, and the scale of the market is gradually expanding, but
there are also indications of blind development," she said.
Chinese NEV manufacturers sold 328,000 units in the first five
months of 2018, up 141.6 percent on the year, according to data
released by the industry ministry this week.
Total NEV ownership reached 1.8 million by the end of last year,
more than half of the global total.
Generous local government subsidies aimed at producing regional
industry champions have contributed to overcapacity and
inefficiency, industry executives said in March.
The government is also concerned that the rapid proliferation of
different vehicle designs will hinder the efforts of
manufacturers to gain a foothold in overseas markets.
The industry ministry has already removed tax breaks for nearly
2,000 electric car designs in an attempt to streamline the
sector and curb irrational investment.
(Reporting by David Stanway; Editing by Muralikumar Anantharaman)
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