China takes multi-pronged measures to fuel NEV boom

HEFEI -- With a public charging station newly built about 3 km away from his home, Guo Xin'an, a villager from Juwang Village of Anqing City, east China's Anhui Province, no longer needs to drive to the city proper to charge his new energy vehicle (NEV) -- a great relief for the vehicle owner in rural China.

During a conference held recently in a bid to promote the formation of an NEV industrial agglomeration in the province, Anhui announced the initiation of an all-inclusive charging infrastructure construction at the city, county, and township levels this year. It is expected to basically achieve full coverage of such charging facilities in the province by 2025, making Anhui a user-friendly province for NEV lovers.

As the world's major single market for electric vehicles, China has launched a series of policies to bolster the development of its booming NEV sector, which includes building a complete charging infrastructure network.

In May, China released a guideline to support people living in rural areas to purchase and use NEVs, with a focus on boosting the construction of charging infrastructures. By the end of May, China had built more than 6.35 million units of charging infrastructure.

Besides building a complete charging infrastructure network, governments at all levels across the country have also rolled out a raft of policy incentives to spur NEV production and marketing.

In June, Anhui introduced a slew of measures to form an NEV industrial agglomeration. The province plans to see its automobile production scale exceed 3 million units, among which the NEV output will occupy over 40 percent.

Chengdu, capital of southwest China's Sichuan Province, provides direct monetary incentives for enterprises that develop or introduce NEV car models; south China's Guangdong Province unveiled multiple policies to encourage purchasing NEVs and optimize the driving environment of such vehicles.

To further unleash the potential of NEV consumption, China has announced that it will extend its preferential purchase tax policy for NEVs to the end of 2027. Preliminary estimates show the policy will result in a total of 520 billion yuan (about 72 billion U.S. dollars) of tax exemptions and reductions.

Industry insiders believe that with these favorable policies, China's NEV sales will hit about 9 million units this year, and the share of NEVs in China's automobile market will reach some 60 percent in 2025, with annual NEV sales of about 17 million units.

The burgeoning NEV industry has aroused interest among foreign investors.

"China has grown into a powerhouse of the international automotive industry," said Dr. Juergen Hasenpusch, chief finance officer for Volkswagen Anhui, adding that the Volkswagen Anhui NEV project aims to invest a total of 23.1 billion yuan in research and development (R&D), manufacturing, and sales of NEVs in China.

In late May, Volkswagen inked an investment agreement to build an R&D, innovation, and procurement center for fully connected electric cars in Hefei, capital of Anhui. The center is expected to be put into operation in early 2024.

In April, U.S. carmaker Tesla Inc. announced that it will build a new mega factory in Shanghai, which will be dedicated to manufacturing the company's energy-storage product Megapack.

With the implementation of policies including building more charging facilities in rural areas and exempting purchase tax, China's NEV market is expected to usher in even greater growth, said Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers.