Kirill Klip: Lithium Race Goes Ludicrous Mode: China Proposing California-Like Mandates For Electric Cars.

Monday, 15 August 2016

Lithium Race Goes Ludicrous Mode: China Proposing California-Like Mandates For Electric Cars.

InsideEVs.

China goes ludicrous mode in our lithium race now with these new initiatives for mandates to produce electric cars or purchase carbon credits from their peers. The results for The New Energy Cars from the previous long term state-level planning in China are very impressive already:

China Electric Car Sales Up 188%: Warren Buffett's BYD Dominates Lithium Race.

I would like to share today the great report from CleanTechnica on the lithium race in China. BYD backed by Warren Buffett is the solid leader in the largest market for electric cars in the world in China. BYD has become the largest manufacturer of EVs in the world in May of this year and now is breaking out of the rest of the New Energy EVs automakers with 4 of its electric cars among the 10 best-selling EVs in China in July.

"Klip said Tesla’s Nevada Gigafactory is generating excitement among all stakeholders in the lithium sector. But he added that “the real story of the lithium race is happening in China right now.”

“China became the largest auto market in the world for electric cars last year and (Hong Kong-based) BYD Company is now the biggest manufacturer of electric cars in the world this year,” Klip said, adding that Warren Buffett is a stakeholder.

“In China, they call battery power The New Energy, and it’s part of their current five-year plan. Twenty-five companies are making 51 models of electric cars in China already. A whole new strategic industry is being created from scratch. Ganfeng grew from $3 million dollars in sales in 2000 to $4.5 billion in market cap now.

“Security of lithium supply becomes the most important factor for the leaders to keep their dominant position in the fast-changing marketplace."

Carmakers would be required to build EVs or buy credits
Government planning to phase out subsidies after 2020

China will consider mandates that carmakers produce more electric vehicles or purchase carbon credits from their peers, potentially emulating California’s system and transitioning from a subsidy-driven approach to catalyzing cleaner cars.

The proposed rules will mandate that certain automakers produce or import new-energy vehicles in proportion to the number of fuel-burning autos they sell, according to a draft documentprepared by the National Development and Reform Commission. Companies that fail to achieve carbon dioxide emission reduction targets would be required to buy credits or pay fines of as much as five-times the average price of the credits, the country’s top industry regulator and policy maker said.

China has encouraged consumers to switch from fossil-fuel burning vehicles to electric cars and plug-in hybrids, with the dual aim of reducing pollution and supporting companies in developing what it sees as the dominant auto technology of the future. The latest proposal was prepared after studying California’s zero-emission vehicle mandate, which has gone further than any other U.S. state to promote adoption of electric cars.

“Without question, this will be good for the industry and will promote the development of all types of clean-energy vehicles,” Ye Shengji, deputy secretary general of the China Association of Automobile Manufacturers, said Friday at a press conference in Beijing.

China surpassed the U.S. as the largest market for electric vehicles last year and wants sales new-energy vehicles to exceed 3 million units a year by 2025. To encourage production and sales of such vehicles, central and local governments have spent 15 billion yuan ($2.3 billion) on subsidies since 2009, according to state-run China Central Television. The government plans to phase out subsidies after 2020.

“Given that some key automakers lack the motivation to develop new energy vehicles, there is concern that development in the industry will suffer once the fiscal policies are weakened or dropped,” the NDRC’s draft document said. The rules would be mandatory for automakers of a minimum size and voluntary for others, it said.

— With assistance by Yan Zhang"