Shanghai (ZXZC)- According to the China Passenger Car Association (CPCA), 2018 will see the transformation of China new energy vehicle (NEV) market from a policy-driven one to a market-driven one.

The association said in its analysis of December sales that the government’s license plate support in some purchasing-restricted cities will reach the maximum and Beijing, Shanghai are even likely to give no increment in license plates, which may be a catastrophe for mid-to-large electric vehicles.

Besides, the subsidy for the entry-level A00-class electric vehicle is also likely to be reduced substantially, which may dampen the demand in this segment. If the subsidy from the regional government will also shrink sharply with the simultaneous withdrawal of other supportive policies, the government should stipulate other policies to keep the development. The delay to implement the dual-credit system for NEV will be a hard blow for NEV producers and have negative effect on their plan. 

At the end of the analysis, CPCA drew a conclusion that China NEV market would undergo a transition period from one stimulated by government’s policies to one driven by the market itself in 2018. In addition, it also said that the auto market will be under great pressure and that the industry should not be too optimistic about NEV sales growth in 2018.