By on June 20, 2017

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With the possible exception of the United States in the near future, emission regulations are getting harsher everywhere. Nowhere is that more true than China. Not only does Asia’s most populous country have some of the most stringent emission requirements for new cars, it also has the strictest sales quotas for electrically powered vehicles on the planet. Too strict, according to some automakers.

A Chinese draft regulation issued last week stipulates automakers must sell enough electric or plug-in hybrid vehicles to comprise 8 percent of total volume by 2018, 10 percent by 2019, and 12 percent by 2020. This comes after talks between Chinese Premier Li Keqiang and German Chancellor Angela Merkel that hinted China might have mercy on Germany manufacturers. 

While Volkswagen has pleaded for China to reconsider the timeline, it has specified that it would adhere to the 2018 standards if forced to do so. Meanwhile, BMW flat-out said it couldn’t.

“Just like all the others, we were below 6 percent last year, and I mean significantly below,” BMW China chief Olaf Kastner told Automotive News China in the country where the carmaker has a joint venture with Brilliance China Automotive Holdings.

However, it’s not just German automakers that should be concerned. Most major manufacturers are trying to establish strong global sales while targeting China as a part of that endeavor. But the rules are different in China. Not only do companies have to get into bed with a Chinese firm just to do business inside the country, the stiff regulations are shaping the type of cars they can sell. The only way to stop this from influencing the sort of vehicles automakers sell worldwide is to have region-specific models, abandon the Chinese market, or play ball and offer more BEVs or plug-ins immediately.

According to Reuters, the most recent legislative draft by China’s Ministry of Industry and Information Technology is open for public comment until June 27. German Chancellor Angela Merkel announced at the start of the month that China had agreed to concessions on the timeline of quotas, but the most current draft does not reflect that. It’s unchanged from one issued in September, with no alterations relating to the proposed Merkel rescheduling.

Dominik Declercq, China’s representative for the European Automobile Manufacturers Association, said the new draft indicated China definitely had not changed its mind on the issue. “That’s what it looks like: no compromise, no concession,” Declercq explained.

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20 Comments on “Automotive Industry Annoyed China Gets to Decide What Engines It Offers...”

  • avatar

    “Industry Annoyed”? Heck I’m annoyed!

  • avatar

    Will not be long before foreign manufacturers are asked to leave. Huge hit to the bottom line.

  • avatar

    Last I checked China was a sovereign country and allowed to set its own vehicle emissions regulations. This will spur massive investment and innovation in hybridization and electrification by manufacturers wishing to remain in the Chinese market – which is everyone.

  • avatar

    Don’t build your sh*t in China and you don’t need to worry about it.

  • avatar

    They’ve accommodated CARB, an unelected board in California, driving up the cost of cars in the other 49 states.

  • avatar
    Phil Ressler

    By any measure, this is good for China and good for us. You don’t have to believe in anthropogenic contributions to climate change to appreciate the local benefits of burning less gasoline and diesel fuels, thereby slashing their toxic byproducts and particulates. The US led the way in cleaning up vehicle emissions, and California led the US. The benefits have been dramatic over the past 50 years. If the current administration insists on ceding global leadership for cleaner, lower emissions, it’s a self-inflicted wound for us to hand that opening to China or anyone else with the market clout to bend the global automotive market to its will. As California had the market clout to pull the US into a cleaner automotive future, so today does China to pull the globe in a cleaner, less emissive direction. Everyone everywhere benefits if they succeed.

    Electric cars, hybridized pickups and utility vehicles, electrification of urban transit are all feasible for adoption at a much faster pace. China’s regulations will force more imagination, intellectual capital and cash to be directed toward removing objections held by sellers and buyers alike. MAGA – stop ceding global leadership or accept the consequences and don’t whine when someone else picks it up to claim it as their own.


    • 0 avatar

      China’s rulers know that their middle class is huge. Wealth and education has increased exponentially among that class. Those people care about their quality of life and big part of that is living in a cleaner environment. Chinese rulers are wise enough not to ignore the wants and needs of those that could cause them a lot of grief.

  • avatar

    This site is called The Truth About Cars, and this is the truth: a whole lot of rising consumers in China will indeed have a worldwide cascade effect on what emerges from the R&D process, design and, ultimately, manufacturing.

    Here’s also another truth about cars: people on car site comment threads love to kvetch about how they’ll never buy the Ferrari sold with an automatic and not a manual transmission. Or that 152 hp on a compact car is “too little, no sale.” Or any other number of hangups. But the fact is that most people just drive their cars in a straight line with occasional turns and curves between their homes and work or shopping, and those activities account for probably 75% of their miles driven at an average of 35 mph when underway.

    Anything that reels in ridiculous engine sizes, chassis sizes, low fuel efficiency and undermines this absurd ego alignment with one’s automobile is good in my book.

    • 0 avatar

      China wants to position itself as the next world leader. “Someone” will fill the void left by the USA if their current experimentation with nationalistic localization continues unabated.

    • 0 avatar

      Meanwhile, I will continue to enjoy my ridiculously sized chassis and engine with low fuel efficiency that I enjoy driving. Such vehicles will probably become more rare as more and more vehicle purchasers become sheep-like and buy their beige boxes. I guess when there are fewer people like me, they will cost more but I already have mine and plan to keep it running as long as possible. I hope that others will not be locked out of the fun that I have through narrow-minded decisions by suppliers.

      • 0 avatar

        @nvinen – pickups and SUV/CUV’s are what sell the most in the USA. If you are going to label anyone “sheep-like”, it would have to be the buyers of those vehicles.
        Many are choosing to “be locked out of the fun” just by their purchase choice. A 20 ft long pickup isn’t going to be much fun for a city dweller but is a blast for me to drive in a rural setting.

  • avatar
    Big Al from Oz

    I do discuss the inadequacies in the current direction of US regulatory, taxes, incentives, barriers, protection, etc to set the US up to remain most competitive future automotive industry.

    The US needs to start making greater change to suit a completely globalised world.

    In the banking and finance industry the US has managed to do well through deregulation. The reality is any industry does better in a more relaxed and competitive environment.

    If the auto industry had far less constraints the US would export more, because the industry would be more attuned to customer needs. This in turn would ensure the future of the industry.

    China will become the world’s largest vehicle exporter. Barriers will not stop this occurring.

    The Chinese have also adopted most of the design and emission standards the world is working towards. As Chinese economic strength expands it is inevitable the standards they want will become significant in all vehicles globally.

    For the US to better tap into this market the big 3 must stop the way they run global operations. The idea of producing for regional markets has failed, look at GM with Opel, Holden, Vauxhall and even Izuzu to a degree.

    This regional approach for the Chinese market will come undone as competition increases.

    The US is not a special market, managing it as such will gradually weaken it into obscurity and it will become more and more a place with Mexico to assemble imported parts.

    • 0 avatar

      Deregulation in the banking industry was a leading cause of the financial crisis.
      What is in the car makers interest is not always in the general public’s interest.

      • 0 avatar
        Big Al from Oz

        I do believe in regulatory instruments for consumer protection not industry protection. The same can be said for welfare industrial welfare should not exist.

        Unfortunately most regulations don’t protect the consumer or promote a more progressive environment.

        Regulatory bias is geared towards the rich and promotes inefficiencies, which ultimately costs the consumer, whether its corn, US lumber, dairy, motor vehiclesand on and on.

        So yes, regulation that promotes industry at the expense of the consumer is poor regulation.

  • avatar

    I should be annoyed, but I’m not.

    Mainly because the last fifty years have been a constant litany of whining, wingeing, and crying, “You can’t expect us to do that. It’ll put us out of business.”

    And then, when the government doesn’t back down, the automakers find a way to do it anyhow. As in, they had it figured out from the moment the new specifications were mentioned, but didn’t want to because it would cost money.

    Sorry, when it comes to environmental rules, I have absolutely NO sympathy for the automakers.

  • avatar

    China gets the majority of its electric from coal, so I’m not sure mandating electric vehicles is all that helpful in fighting pollution or carbon emissions.

    • 0 avatar
      Phil Ressler

      China is proactively moving off coal faster than any other coal-intensive country. They are also instituting more aggressive emissions regulations for coal plants that they will keep. Overall, their coal fleet is newer, more efficient and less polluting than the US’. Plus they’ve cancelled over 100 planned coal power projects. Emissions standards for plants in use in 2020 will be stricter/lower than anything in the US or Europe, and plants that fail will be retired. So, realizing that they need to move off coal but cannot turn that ship on a dime, they are building renewables generation at a massive investment clip, greening coal to the best extend they can, and arresting then slashing future dependency on coal.

      Here’s an interesting overview barely a month old:

      China is playing a long game at an accelerating pace. Over the life of a new electric vehicle, the power generation behind it will be cleaner by the year. 1969 was our year of tipping into serious environmental action. For China, it was 2011 and they are moving with alacrity.


  • avatar

    firstly, we should all be grateful for the Chinese consumer, otherwise you would be stuck with s…y little eurohatchs or cramped little USA barges. Chinese come with added length.
    stretched Nissan Altima check
    stretched Hyundai Sonata check
    Malibu that aren’t cramped at the back check
    it took China style to get Americans decent rear leg room in mid range cars. China like their cars longer than Americans.

    now the changes that China are proposing are big, basically USA federal CAFE and CARB state ZEVs all rolled together.

    basically China jumps to CARB level ZEV next year, for the companies not prepared, too bad, they can stop production until they buy enough credits or sell enough NEVs. This will be tough on the Germans and the Japs, GM should be OK.

    Also expect a lot of 48V mild hybrids, a lot.

    and just like CARB the percentages are crap, they are actually nominal so a PHEV is about 2 units and a EV is about 4 units, so roughly divide by 3 to get approximate requirements, so 12% is really about 4%. not hard for many Chinese car companies.

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