The electric vehicle market is expected to resume, China will reopen the electric vehicle production license

Before the issuance of electric vehicle production licenses was suspended by the state, the state believes that the current development of electric vehicles will face more difficulties. Moreover, large quantities of electric vehicles have entered the market, and production has not been controlled, seriously damaging the market order.

On November 14th, according to reports, sources said that the Chinese government is considering resuming the approval of electric vehicle production licenses, which will open the door for Ford, Tesla and local automakers to produce electric vehicles. It is reported that the National Development and Reform Commission of China has been evaluating the overcapacity of electric vehicles. The source said that the work related to the production license for electric vehicles will be resumed as early as the first half of next year.

The National Development and Reform Commission suspended the issuance of electric vehicle production licenses earlier this year to control capacity expansion. It is estimated that more than 2 million new energy vehicles will be added each year, and relevant agencies are reassessing the production of electric vehicles.

The National Development and Reform Commission did not comment on the news of reopening the license, saying that the current licensing plan is being revised and hopes to raise the threshold for new entrants.

Since March 2016, China has issued 15 electric vehicle manufacturing licenses. Local manufacturers Wanxiang Group and joint ventures between Volkswagen and domestic producers are among them, which also promotes competition in the automotive industry. As a result, smart TV and air conditioner manufacturers are planning to enter the new energy vehicle industry.

Most importantly, foreign automakers Ford and Tesla are preparing to enter the Chinese electric vehicle market to meet increasingly stringent carbon and fuel economy requirements. The new joint venture between Ford and Anhui Zhongtai Automobile Co., Ltd. plans to set up a factory to produce 100,000 pure electric passenger cars per year. According to reports, Tesla has reached a preliminary agreement with the Shanghai government to produce locally. CEO Elon Musk told investors this month that the company is still three years away from production in China.

The licensing program is also a key step for the Chinese government to manage the world's largest new energy vehicle market. The Chinese government announced last week that it will pilot before June next year to allow foreign automakers to set up wholly-owned electric vehicle factories in the free trade zone. Beginning in 2019, China will require most automakers to obtain new energy vehicle ratings. If they do not meet the requirements, they will face rectification or punishment.

With the support of the country, China surpassed the United States in 2015 to become the world's largest new energy vehicle market, including pure electric vehicles, plug-in hybrid vehicles and fuel cell vehicles. According to the statistics of the China Association of Automobile Manufacturers, a total of 507,000 new energy vehicles were sold nationwide last year. China has suspended the expansion of traditional gasoline vehicle production capacity, with the goal of increasing the annual sales of new energy vehicles to 2 million by 2020.