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China plans to ban new combustion engine vehicle manufacturers

Beijing

New draft regulation on auto investment by the National Development and Reform Commission (NDRC) has revealed China’s plan to ban new manufacturers of fossil-fuelled vehicles.

The NDRC’s proposals will also see existing automakers encouraged to increase investment in the development of new energy vehicles.

The key message of the regulation is to maintain concentration on vehicle and power battery manufacturing. This will also help new energy vehicle makers enter the Chinese market, according to the analysis of China Merchants Securities.

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Another aim of the regulation is to enhance the investments access standard, prevent disorderly development and improve administration of investment into the automobile industry.

The new proposal also states that enterprises and provinces with low utilisation rates of automobile capacity should be urged to increase efforts to boost production through mergers and acquisitions.

There will also be more stringent requirements on existing auto companies in order to expand their fuel vehicle production capacity.

Support will be given to state-owned auto companies and other types of enterprises to ensure mixed ownership reform and encourage the creation of collaborative alliances and automotive enterprise groups.

China will also help social capital and companies with strong technical capabilities to invest in industries such as smart cars, energy-saving cars, new energy vehicles and key components, battery recycling technology and advanced manufacturing equipment.

This regulation by the NDRC follows the news that Bejing has selected 33 road sections with a total length of 105km for testing automotive cars. Self-driving vehicles have travelled safely for 26,000km in test areas in the capital city, according to a service provider of road tests for autonomous vehicles, Bejing Innovation Centre for Mobility Intelligent.

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