Fuel Consumption Standards in China gets Tougher, Alternative Energy Vehicles Serve as Bail out

In 2016, passenger vehicles sold in Chinese market have to face the 4th phase, which is also the most stringent phase, of China’s fuel economy standards for passenger vehicles.

According to China’s Ministry of Industry and Information Technology, the new standards, which have been effective since this Jan 1st , will limit both the fuel consumption of individual models’ and of the whole companies’, and reduce the average fuel consumption of Chinese domestic passenger vehicles to below 5.0L/100km gradually by the year of 2020 .

According to our source, the scope of assessment during the 4th phase has been expanded to cover natural gas passenger vehicles and alternative energy passenger vehicles, including pure electrical vehicles, plug-in hybrid electricalvehicles and fuel cell vehicles. To be noted, these models could enjoy a bonus credits during the assessment of the model’s fuel consumption level and also bring benefits during the assessment of the company’s corporate average fuel consumption.

In a bid to achieve a corporate average fuel economy of below 5.0L/100km by the year of 2020, carmakers’ challenges mostly come from SUV models because of their relatively high fuel consumption. While to be noted, SUVs are now, without any doubt, one of the most popular models in Chinese market. Under this background, besides the application of traditional methods including stop-start technology and lightweight technology, accelerating the development of alternative energy vehicles is the way to go for most carmakers.

Even though the current sales of alternative energy vehicles is not even close to the traditional vehicles, due to China’s preferential policy for these models, they still serve as a bail out for China’s domestic carmakers in their way to achieve the 2020 goals.