China's New Energy Vehicle mandate policy (final rule)
China finalized its New Energy Vehicle (NEV) mandate in September 2017. The NEV mandate is a modified version of Californiaʻs Zero Emission Vehicle (ZEV) mandate, with goals of promoting new energy vehicles and providing additional compliance flexibility to the existing fuel consumption regulation. It applies only to passenger cars and will formally take effect April 1, 2018.
The rule establishes NEV credit targets of 10% of the conventional passenger vehicle market in 2019 and 12% in 2020. Each NEV sold generates some number of credits, depending on characteristics such as electric range, energy efficiency, and rated power of fuel cell systems. The final NEV market share achieved under the influence of the credit targets will therefore depend on the final fleet mix.
In the final rule, MIIT made several major changes from the interim proposal:
- One-year delay in mandatory NEV credit requirements, from 2018 to 2019
- Tightened exemption criteria for small-volume manufacturers
- Stricter technical thresholds on speed and e-range for NEV credit qualification
- Variable per-vehicle credit for battery electric vehicles (BEVs) based on e-range
- Higher per-BEV credit based on electric efficiency
- Variable per-vehicle credit for fuel cell electric vehicles (FCVs)
This policy update provides an overview of how the NEV mandate policy will work, summarizes the major differences between the final rule and the interim proposal, and evaluates potential impacts of this policy.
Figure 3 was updated as of 3/16/2018 to correctly reflect how the curb weight and energy consumption of a BEV impact its per-vehicle NEV credit.
Figure 4 was updated of 5/25/2018 to correctly reflect how the curb weight and fuel consumption of a PHEV impact its per-vehicle NEV credit.