China plans to increase funding for the production of electric vehicles
On Tuesday, the PRC government published a draft plan to increase lending to the production of energy vehicles (NEV) to 14% in 2021, to 16% in 2022 and to 18% in 2023, up from 10% this year. The move aims to stimulate a reorientation of the automotive industry towards the production of electric vehicles.
The draft plan is open for public comment until August 9.
Beijing introduced a credit rating program in 2017, whereby domestic car manufacturers receive higher ratings based on how many electric and hybrid vehicles they sell. Domestic carmakers could get EV production credit at 10% in 2019, up to 12% in 2020.
In January-May, China produced 480,000 NEV, up 46% from a year earlier, and sales rose 41.5% to 464,000 units. China plans to produce and sell 1.5 million NEV this year, according to the country's Ministry of Industry and Information Technology (MIIT).
The credit rating program has prompted many Chinese automakers, including Geely, FAW, BYD, Great Wall Motors and Changan, to ramp up production of electric vehicles over the past few years.
Rapid growth in NEV production in China has prompted battery manufacturers to increase output, driving demand for metals used in battery materials such as cobalt, nickel, lithium and manganese.