As China stares down climate change and smog alerts in numerous cities, the central government has extended its tax rebates for hybrid and electric vehicles for another three years.

Announced on December 27, the move is one of many recently that will eventually see traditional internal-combustion cars all but eliminated from new vehicles sales in the country.

The changes to vehicle policy in China have sparked a growing electric vehicle industry, with both new and established companies vying for customers amid the shift.

DON'T MISS: 2017's most important green car story: internal-combustion engine ban in China

Reuters reports, "New-energy vehicle sales in January-November jumped 51.4 percent and are on track to hit a target of 700,000 NEV sales this year."

The shift to so-called new-energy (or electrified) vehicles is partly due to government regulations that stipulate automakers must sell a minimum number of those vehicles each year, starting in 2019.

Demand has been stoked by government incentives—including the just-extended tax rebates—that make it easier for consumers to purchase a hybrid, plug-in hybrid, or all-electric vehicle.

Nio ES8 high-performance electric SUV

Nio ES8 high-performance electric SUV

Meanwhile, the U.S. Environmental Protection Agency is considering rolling back fuel-economy rules for 2022 through 2025 vehicles that have been in place since 2012.

The move would appease automakers who claim they are harder to meet as more and more American buyers move from cars to crossovers and trucks.

The sales-weighted fuel economy of all vehicles sold in the U.S. has now stayed at 25 mpg for four years.

CHECK OUT: China is serious on fuel economy: 500-plus models to go out of production

The Trump Administration is now reviewing the 2022-2025 fuel-economy regulations; it has said it is even studying rolling back those rules to 2021 levels.

Yet, in China, the government just forced the end of production for some 553 fossil-fuel vehicles, citing their violation of new fuel-economy benchmarks that took effect January 1.

Recently, Gas Buddy's annual gas-price forecast predicted the cost of fuel in the United States is likely to rise in 2018 by $0.19 per gallon on average.


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