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[China] Introduction of incentives for scrapping gasoline-powered vehicles / Beijing's shift to EVs continues

  • Release date: Apr 20, 2021
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Sales of EVs surpass 1.2 million units thanks to campaign effects

From April 2020 to December 2021, the city of Beijing is running a campaign to promote the scrapping of gasoline-powered cars. The city of Beijing will cover all the costs of the scrapping process, and will also pay more than 2,200 yuan (about 37,000 yen) as an incentive to car owners, depending on the type of car. In addition, to encourage people to switch to EVs, the city will pay up to 10,000 yuan (about 168,000 yen, depending on the model and brand) if they purchase an EV car within one year of scrapping their gasoline car. Thanks in part to Beijing's extensive campaign and publicity, the shift from gasoline to EV cars has been progressing over the past year, and sales of EV cars have been steadily increasing, with sales of EV cars in China topping 1.2 million units in 2020, or about 6.3% of the car sales market.

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A trend watcher covering the area actually used this campaign to scrap a Japanese-made gasoline car in November 2020. First, he contacted the Beijing municipal government's waste management department to inform them of his intention to scrap the car, and then the contractor who was undertaking the work contacted him via WeChat to set up a date and time for the procedure. At a later date and time, the contractor will come with a tow truck to pick up the car. About a week after the delivery, you will receive a "certificate of disposal completion" and "incentive bank transfer requirements" by mail. After submitting the documents, the incentive was transferred to the designated account in about one week. Until now, most of the people who drive EVs have been those who were not drawn in the lottery for gasoline car license plates, perhaps as a symbol of status rather than eco-friendliness (in Beijing, license plates for new gasoline cars have been drawn by lottery since 2011). In the past year or two, the popularity of affordable small EVs from China (60,000 yuan / approx. 1 million yen and up) has led to the expansion of EVs to a wide range of income groups, not just the wealthy. The most popular EVs are the American Tesla (Model Y is about 340,000 yuan / about 5.7 million yen) and the Shanghai-based Ullai (NIO) SUV (about 358,000 yuan / about 6 million yen and up).

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By 2035, all new car sales will be new energy vehicles and hybrid vehicles.

Since 2011, Beijing has been regulating the number of newly registered gasoline vehicles by introducing a lottery system for obtaining gasoline vehicle license plates. However, new problems have arisen, such as the buying and selling of license plates on the black market, and the original goal of eliminating traffic congestion and air pollution has not been achieved.

As a result of the campaign to incentivize the scrapping of gasoline vehicles, EVs have been rapidly gaining popularity in Beijing, and charging facilities can be seen throughout the city and residential areas. In contrast, EV vehicles were allowed to register without a lottery (with a cap set at 1 million). In October 2020, the Ministry of Industry and Information Technology (MOIT) of the People's Republic of China (an administrative body responsible for formulating and implementing plans for the industrial sector) announced that all new cars sold in 2035 will be electric vehicles (EVs) and other new energy vehicles (NEVs), as well as hybrid vehicles. This means that gasoline-powered cars will disappear from the new car market in China by 2035.

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This article is co-authored by TNC Lifestyle Researcher (http://lifestyle.tenace.co.jp/) and Intage's Global Researcher. Translated with AI Translator

  • TNCアジアトレンドラボ

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    TNC ASIA Trend Lab

    TNC ASIA Trend Lab is an information organization run by TNC Inc. that researches and shares trends in Asia. It supports corporate marketing activities by finding insights from trends rooted in the lifestyles and habits of local consumers.
    http://tnc-trend.jp/

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    Intage Inc.

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