Published: Tue, September 12, 2017
Money | By Oscar Reynolds

China is planning to implement a ban on fossil fuel cars

China is planning to implement a ban on fossil fuel cars

World's auto industries are expecting that the Chinese vehicle electrification plan would lead to a dramatic shift in the market given that the country's consumers represent the largest car-buying population on Earth.

The development is coming two months after the United Kingdom, like Germany, France, India, Norway and Netherlands, announced plans to take out fuel-run cars, as part of efforts to reduce air pollution.

In Germany, Chancellor Angela Merkel has hinted that it's only a matter of time before the country that invented the modern auto sets an expiration date of its own.

Tesla is working on a deal to build its vehicles in Shanghai in order to expand sales there.

"The measures promote profound changes in the environment and give momentum to China's auto industry development", he told state broadcaster, China Central Television.

Song Qiuling, a Senior Official from the Ministry of Finance, during Saturday's event warned that if government subsidies that are intended for scaling-up the electric vehicle industry are held for long, they could be abused leading to a "mindless expansion" and excess capacity in the sector. They now limit the number of conventionally powered vehicles that can be registered each month, though those restrictions are waived for qualified alternative-powered models. Nicolas Hulot, France's ecology minister, stated that "the conditions are there", even though he didn't elaborate on how this plan would be enforced. Sales of pure electric vehicles surged 65.1 per cent year on year to 409,000, accounting for 80 per cent of new energy vehicle sales, the Xinhua report said.

The move is generating some controversy.

Chinese officials have not yet given a timeline for when the ban will take place.

Last year, China passed the United States as the biggest electric vehicle market. That's more than twice as many as the number sold in the U.S.

Jin Zheyong, left, and Peter Fleet are all smiles after signing a deal to jointly develop, produce, sell and service EVs in China.

China already suffers from high traffic congestion, and consequently, alarming air pollution levels. But many of those are now being replaced by cleaner energy sources.

"Our efforts are quite huge, so we want to contribute to and be on the forefront of the electrification of the Chinese automotive industry".

The subsidies are good news for electric auto manufacturers. This includes scope of foreign carmakers to create a third joint venture with local automakers, under the condition that it is for the development of electric vehicles.

Carmaker Volvo said in July that all its models would have an electric motor starting in 2019.

China is also the largest consumer of electric and hybrid cars.

Tesla has indicated it is also considering a Chinese assembly plant.

China may be the next nation to implement a ban on the sale of vehicles powered exclusively by an internal combustion engine.

A similar deadline has been given by France, leading some to predict that China would also opt for a 2040 cut-off point. A lot of these will be made in China and powered by locally made batteries.

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