Shanghai (ZXZC)- Policies on foreign investment in the automobile industry will be optimized to guarantee equal treatment in market access to new energy vehicles produced by both domestic and foreign-invested automakers, according to a State Council executive meeting chaired by Premier Li Keqiang on October 16.

The Measures for the Parallel Administration of the Average Fuel Consumption and New Energy Vehicle Credits of Passenger Vehicle Enterprises (hereinafter referred to as the Measures or dual credit policy for NEVs) will be amended, allowing credit to be transferred among foreign-invested vehicle companies.

Initially released on September 28, 2017, the Measures said then passenger vehicle enterprises whose annual output or import volume of traditional energy passenger vehicles did not exceed 30,000 shall not be subject to any requirement for credit ratio of new energy vehicles; if it was not less than 30,000, the requirements for credit ratio of new energy vehicles shall be set from 2019.

The Measures also pointed out that average fuel consumption credits surplus can be transferred among Correlated Enterprises whose definition is in the following:

1.     Domestic PV automakers and Domestic PV automakers in which the former holds over total 25% shares directly and indirectly.

2.     Domestic PV automakers in which the same third parties Within the Territory of China take over total 25% direct and indirect shares.

3.     Imported PV Suppliers authorized by Overseas PV automakers and Domestic PV automakers in which the Overseas PV automakers hold over total 25% shares directly and indirectly. 

China's Ministry of Industry and Information Technology (MIIT) issued the amendments to it on July 9, 2019. According to the Amendments, the credit ratios of new energy vehicles are required to be 14%, 16% and 18% respectively for the year of 2021, 2022 and 2023, versus 10% and 12% for 2019 and 2020 required by the original Measures.

The MIIT drafted amendments again to the Measures in September, 2019. The definition of Correlated Enterprises is fine-tuned as following compared to the original Measures.

The “Domestic” in the second rule is deleted and an annotation of “Domestic PV automakers which take over total 25% shares directly and indirectly in the Overseas PV automakers” is added to the third rule.  

The optimized policy will be more favorable to foreign-invested automobile companies.