China likely to relax green rules to boost electric car production

China's industry ministry said on Monday it might temporarily ease quotas designed to boost production of electric cars, in an attempt to help automakers in the world's biggest market revive sales badly bruised by the coronavirus pandemic. China has some of the world's strictest rules regarding the production of fossil-fuel vehicles, as it battles unhealthy levels of air pollution in its crowded cities.

Automakers in China are obliged to manufacture new energy vehicles (NEVs), including all-electric, plug-in hybrid and hydrogen fuel cell vehicles, to win "points" to make up for a portion of the negative points they incur when they produce internal combustion engine vehicles.

Depending on the present situation, the Ministry of Industry and Information Technology said in a policy that it might temporarily adjust the quotas and allow automakers to use the green points they generate next year to offset their negative points this year. Industry officials consider it a supportive move as automakers can manage vehicle production better with less policy impact.

Reuters exclusively reported the policy discussion in April, citing people familiar with the matter. Sources also told Reuters that China would delay implementation of some emission rules by six months, which China's state planner later confirmed. The temporary easing of NEV quotas is likely to allow companies to delay model launches, which have more costly technology than conventional vehicles, and also discourage them from aggressive marketing.

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