(Beijing) — China's State Council said this weekend it will not approve the establishment of new factories that manufacture gasoline- or diesel-powered vehicles except in special circumstances.
The rule was among other issues that China's cabinet discussed Saturday at its regular meeting, chaired by Premier Li Keqiang, according to a statement on the State Council's website.
"In principle, local governments should not approve the formation of new car factories that produce traditional fuel-powered vehicles," the State Council said. However, one analyst said exceptions may be made in certain situations, such as when an additional factory is necessary to meet a company's previously approved sales targets.
The guideline comes as Beijing is pushing for cleaner electric and hybrid cars to curb air pollution and foster the development of a cutting-edge sector of the economy. However, a lack of national coordination in the electric-vehicle industry has resulted in widely varying standards for various brands of cars, batteries and charging stations.
Although sales of new-energy cars quadrupled to 331,000 last year — making the country the world's largest electric-car market — it was a fraction of the 24.6 million vehicles sold in the country, according to the government-backed China Association of Automobile Manufacturers.
"Now that the government will stop approving traditional fuel-powered factories, it will boost battery and charging posts manufacturers' confidence," said Ye Junwei, an analyst at WAYS Consulting Co., a Guangzhou-based consulting group for the automotive industry.
The policy shouldn't threaten the business of traditional-car manufacturers in the short term because the government usually approves companies' annual sales targets several years in advance, Ye said. For example, the government has approved the SAIC Volkswagen joint venture's plan to sell 2 million cars in China in 2020, he added. The company would be permitted to meet that goal even if it meant opening a new factory, he said.
（Source：Caixin）
