It may be human nature to avoid doing things that are for the long-term good but impose short-term costs.

Exercising more, giving up smoking, or paying more for a car that is better for the environment all challenge many otherwise responsible citizens.

And it's abundantly clear that the emergence and sales of electric cars benefit greatly from government regulations designed to encourage them.

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With the U.S. withdrawal from the Paris Climate Agreement, China is poised to emerge as the globe's large-scale leader in reducing carbon emissions.

Its regulations to encourage electric cars are far more draconian and prescriptive than anything California might imagine in its wildest dreams.

The global auto industry, just like a confirmed smoker, is pushing back against stiff electric-car mandates now under discussion by China's government.

Slide detailing Volkswagen Group China electric car plans (via Autohome)

Slide detailing Volkswagen Group China electric car plans (via Autohome)

It's not at all clear that China much cares what pain it will impose on the world's established auto industry.

In fact, as one old China hand points out, the regulations likely serve a second purpose as well: to give Chinese makers a foot up against more experienced foreign companies.

That would further the country's longstanding goal of dominating global electric-car production (as well as production of both lithium-ion cells and photovoltaic solar panels).

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Reuters reported in mid-July that a coalition of European, Japanese, Korean, and U.S. auto-industry trade groups had sent a letter that called China's new electric-car sales mandates "impossible" to meet.

The June 18 letter, it said, was addressed to the head of China's Ministry of Industry and Information Technology. It was first reported by WirtschaftsWoche magazine in Germany.

It was signed by the American Automotive Policy Council, the European Automobile Manufacturers Association, the Japan Automobile Manufacturers Association and the Korea Automobile Manufacturers Association.

Buick Velite 5 to be sold in China (Chevrolet Volt in North America)

Buick Velite 5 to be sold in China (Chevrolet Volt in North America)

The rules spelling out sales quotas for battery-electric and plug-in hybrid cars are still in draft form, but they are to take effect in 2018. Under the current draft, one quarter of all vehicles sold in China are to have plugs by 2025.

The letter said the "ambitious enforcement date" of the latest draft "is not possible to meet," and asked that implementation be delayed at least one year and that the regulations give makers more flexibility in meeting the quotas.

It raised several specific concerns:

  • The rules do not allow makers to "bank" credits for cars already sold and transfer credits among model years;
  • Foreign carmakers do not receive the same subsidies for producing new-energy vehicles and their batteries as Chinese makers do;
  • Automakers who don't meet quotas may be banned from importing and selling plug-in cars altogether.

Aoxin Ibis electric car. Photo by

Aoxin Ibis electric car. Photo by

The ministry declined to comment to reporters on the draft rules.

Michael Dunne, of Dunne Automotive consultants in Hong Kong, has had more than two decades of experience in the Chinese market that is now the world's largest.

He suggests that China's bureaucrats may not be much interested in what the rest of the world's auto industry thinks.

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He noted that the China Association of Automotive Manufacturers, that country's trade group for its automakers, is not a signatory to the letter calling the rules "impossible."

Of 28 million vehicles of all types sold last year in China, he noted, 96 percent were built within the country.

China has tested the limits of its regulatory power for 33 years, Dunne said, since Beijing Jeep became the first joint-venture assembly plant as China loosened rules on production.

2014 Tesla Model S in China

2014 Tesla Model S in China

Then it had no power, and could not force that venture to export vehicles and bring in hard currency. "Today, the tables have turned," Dunne wrote to Green Car Reports.

"If certain global carmakers cannot or will not make the new energy vehicle quotas, demand could be met by the wave of up and coming Chinese electric-car makers."

"How long before rattled global automakers, more dependent than ever on China's market, start learning a proper kow-tow?"

[hat tip: Gary Zavitz]

Postscript: Dunne added in a later note, "Kow tow is from the Chinese ke tou which means 'knock head' (against the ground). Or, for foreign automakers, against the wall."


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