China To Punish Automakers That Don’t Meet Fuel Economy Standards

Though China’s lax automotive regulations have been rarely enforced, the central government says that it will begin publicly naming and punishing companies that don’t meet fuel economy and emissions standards, reports Euronews.

China’s major cities have notoriously dangerous levels of smog, and the government is pushing a scrappage program for older vehicles as well as generous incentives towards the purchase of plug-in hybrid and electric vehicles. But it also wants to enforce fuel economy standards that by 2015 call for average fuel consumption of 6.9 liters per 100km, which works out to about 34 MPG. By 2020, the average MPG rises to over 47 MPG, and automakers that don’t comply face stiff penalties.

Beginning in 2015 the government plans to clamp down on non-compliant automakers, limiting their production and levying fines against companies that don’t meet the call for higher fuel economy. New models that don’t meet standards will be banned from production, and the government will halt expansion plans of companies whose cars aren’t up to snuff. Of the 85 automakers selling vehicles in China, about 30% of them (almost all of them native Chinese companies) failed to meet last year’s standards, and while the government has turned a blind eye in the past, those days are over. 13 international automakers also failed to meet those standards, including GM and Nissan, but have a wider product portfolio to draw upon.

Unfortunately for China’s budding auto industry, few domestic automakers are expected to be able to meet the fuel economy standards set for 2020. One of the exceptions is BYD, which has embraced a fully-electrified lineup of hybrid and electric cars, but many smaller companies will struggle with these standards. It will likely lead to a serious consolidation of the oversaturated Chinese car market.

This move is another, more subtle way of China pushing automakers to develop more hybrid and electric vehicles, which up until this year have sold pretty poorly in the People’s Republic of China. But a new round of insanely generous incentives have propped up the EV industry in a big way, and China stands to become the biggest market for electric cars in the world.

Source: Gas 2.