(ECNS) - China plans to ban new manufacturers of fossil-fueled vehicles and encourage existing automakers to increase investment in the development of new energy vehicles, according to a draft regulation on auto investment by National Development and Reform Commission.
The regulation aims to improve administration of investment into the automobile industry, enhance the investment access standard, and prevent disorderly development, said the top economic planner. Priority will be given to strictly controlling the production capacity of fuel vehicles, actively promoting new energy vehicles, and building an intelligent, innovative automobile development system.
Provinces and enterprises with low utilization rates of automobile capacity are encouraged to increase efforts to phase out backward production capacities and conduct mergers and acquisitions, according to the regulation. Existing auto companies also need to meet more stringent requirements to expand their fuel vehicle production capacity.
China will also support social capital and companies with strong technical capabilities to invest in fields including new energy vehicles, smart cars, energy-saving cars and key components, advanced manufacturing equipment, and battery recycling technology.
Support will be given to state-owned auto companies and other types of enterprises to carry out mixed ownership reform, strengthen alliances, and form world-class auto enterprise groups.
According to the analysis of China Merchants Securities, the central message of the regulation on auto investment is to concentrate vehicle and power battery manufacturing and also increase the threshold for establishing fuel vehicle and new energy vehicle makers.
