China outlined a series of measures to increase car purchases, particularly for new-energy vehicles, as the world’s second-biggest economy struggles to escape the shadow of Covid and lift growth.
(Bloomberg) — China outlined a series of measures to increase car purchases, particularly for new-energy vehicles, as the world’s second-biggest economy struggles to escape the shadow of Covid and lift growth.
The National Development and Reform Commission, China’s main economic planning body, set out 10 steps, including lower costs for electric-vehicle charging and extending tax breaks, though it didn’t disclose specific figures.
Carmaker stocks were mixed Friday – out of the top 20 listed companies, half were up and half were down shortly after the mid-day trading break. Brilliance China Automotive Holdings Ltd. was the top performer with a 1.3% gain.
China’s car sales rose 3% to 9.52 million vehicles in the first half of the year compared with the same period in 2022, a slow pace of growth from a low base. Sales of NEVs — EVs and plug-in hybrids — climbed 37% to 3.1 million units, while internal combustion engine car sales slid 8%.
Authorities have been trying to promote car purchases, including rolling out a campaign to boost EV ownership in rural areas. While some companies are thriving, a price war kicked off by Tesla Inc. last year has clouded China’s auto sector and left major automakers playing catchup to their annual targets as potential buyers continue to hold off purchases, waiting for better bargains.
The NDRC announced the latest measures at a briefing in Beijing on Friday. Here are the main themes:
- Encourage local governments to increase annual car purchase quotas.
- Accelerate phasing out of gasoline-powered vehicles.
- Develop used car market, including facilitating vehicle registration.
- Strengthen facilities for NEVs.
- Improve power grid capacity in rural areas to support NEV charging.
- Reduce cost of purchasing and using NEVs, including tax breaks.
- Promote NEV use in public sector.
- Strengthen automobile consumer financial services.
- Encourage carmakers to develop economical and practical models.
- Improve parking conditions.
(Updates share prices, adds bullet on public sector.)
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