China's New Gas Car Ban Doesn't Really Ban Gas Cars

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But the changes will be felt worldwide.

The world's energy industry is changing and the automotive industry is one of the main driving forces of that change. Like a majority of global governments, automakers are fully aware of the climate danger posed by carbon emissions and are adapting their overall technological and product strategies to adapt. GM, for example, has pledged an all-electric future and Tesla continues to be the world's most valuable automaker. The governor of California recently signed an executive order on the hood of a new Ford Mustang Mach-E pledging his state's intention to ban sales of new gasoline-engined vehicles by 2035.

And now China, the world's largest automotive market, has done the same. Well, kind of. According to Nikkei Asia, China has a new plan for all new vehicles sold in 2035 to be "eco-friendly."

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2021 Audi e-tron GT Front Angle View Audi
Front Angle View Audi

What this means is that these so-called "new energy vehicles" will consist of 50 percent being either electric, plug-in hybrid, or fuel cell vehicles, and 50 percent will be regular hybrids. Hybrids, as we all know, still run on gasoline. So, in reality, only half of new vehicles sold in China in 15 years' time will run on something other than gasoline.

The plan, created under the guidance of the Ministry of Industry and Information Technology, aims to incrementally increase the ratio of new-energy vehicles until it hits 50 percent. Last year that figure was at just 5 percent. The goal is to raise the ratio of hybrids to 75 percent of all gasoline-engined vehicles by 2030 and 100 percent five years after that. This plan is part of China's ultimate goal to become carbon neutral by 2060.

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So, what does this all mean for automakers? It's not like they can ignore the Chinese market entirely. The fact is they must adapt and plan accordingly. Japanese automakers such as Honda and Toyota are already in a good position. The latter has been building hybrids for years now to the point where they're nearly a standard part of the lineup; the need for the Toyota Prius may not last much longer because of that. Honda has already announced plans to accelerate its hybrid program.

China is also taking additional steps to create its own internal supply network. Currently, it relies on other countries for this, mainly the US. We expect all other automakers to adapt to China's new plan, if for no other reason than because the cost of not doing business there is too great.

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Source Credits: Nikkei Asia

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