China overtook the U.S. last year to become the world's largest market for electric cars.

But a large portion of the vehicles included in Chinese new-car sales tallies are low-speed electric vehicles that would not meet U.S. standards for highway-capable cars.

Now Chinese regulators are paying more attention to these vehicles.

CHECK OUT: China To Top U.S. Electric-Car Sales? Why Stats Don't Compare (Apr 2015)

New regulations will seek to rein in low-speed electric vehicles, particularly in rural areas, reports Bloomberg.

This move could grant more legitimacy to the manufacturers of these vehicles, but would establish stricter standards for them.

Under the current regulatory framework, there are no rules governing electric vehicles with top speeds below 100 kph (62 mph), according to Bloomberg.



In the U.S., such vehicles are classified as neighborhood electric vehicles, and are subject to their own specific regulations and restrictions.

The current regulatory situation in China has led to a proliferation of cheaply-made vehicles that, in some cases, use lead-acid batteries, according to the country's Ministry of Industry and Information.

The push for new regulations comes amid booming sales of low-speed electric vehicles.

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In China's Shandong province alone, more than 330,000 of these vehicles were sold in the first eight months of this year, according to Bloomberg.

That's compared to 245,000 sales of government-regulated "New Energy Vehicles" nationwide in the same period.

New Energy Vehicle is a term used by the Chinese government that encompasses battery-electric cars, plug-in hybrids, and hydrogen fuel-cell vehicles.



Regulation would give government sanction to manufacturers of low-speed electric vehicles, but it will also force those that don't comply with the new standards out of business.

At least one supplier believes the regulations will ultimately boost sales of low-speed electric vehicles.

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Zhang Tianren, chairman of battery supplier Tianneng Power International Ltd., expects the new policy to spur development of the segment.

Tianneng currently controls 55 percent of the battery market for low-speed electric vehicles.

Kandi electric car

Kandi electric car

In addition to regulating low-speed electric vehicles, the Chinese government is also trying to rationalize many smaller carmakers.

Draft regulations released earlier this year would make it more difficult for startups to get the production licenses they need to assemble and sell cars.

This would effectively cap the number of automakers, something government officials hope will help consolidate expertise and create economies of scale.


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