Joint Ventures To Assist Global Car Manufacturers In Meeting China’s Electric Car Targets

Some of the largest car manufacturers in the world have indicated they will be looking to their partners in China to assist them in meeting the mandate set by Beijing with regards to electric vehicles. Most of these carmakers will use the joint ventures that are on the verge of being phased out.

Recently the Chinese government revealed that rules which forced foreign car manufacturers to form partnerships with local firms on a 50-50 basis in order to manufacture in the world’s largest car market would be ended. Per the new rules foreign car manufacturers will beginning later in the year be in a position of setting up independent firms to build electric vehicles.

American pressure

The move by the Chinese government came after the U.S. government claimed that the rules governing the joint venture arrangements compromised the trade secrets of American car makers. China’s decision to end the joint venture rule has ignited debate over whether the foreign car makers in the world’s most populous country would exit the partnerships with a view to reaping more profits or they would continue with them.

During the China Auto Show car manufacturers that include Volkswagen, Toyota and Ford indicated that they will be relying on their joint venture partners in order to meet the requirements of the government. But even with the help of their local partners most of the car manufacturers were finding it hard to build enough electric vehicles in time to meet the official production mandates that are expected to come into effect in 2019.

EV output

According to the electric vehicle production mandates all the car manufacturers operating in China are required to ensure that between 3% and 4% of their entire output are electric vehicles in 2019 and between 4% and 5% in 2020. The goal of the quotas is to increase the uptake of electric vehicles in China.

Toyota has disclosed that it will begin manufacturing and selling an electric vehicle known as the ix4 which is built on technology which was supplied by Guangzhou Automobile, its joint venture partner. Next year Toyota plans on releasing a plug-in-hybrid which is based on the technology of Toyota. According to a spokesperson for the Japanese car manufacturer Toyota may be required to purchase credits from rival auto makers in the event that it is unable to reach the official targets.

Ford on the other hand is forming a joint venture arrangement with Zotye Auto in order to meet the targets while Volkswagen expects to attain them through its partnership with JAC Motor.

Be the first to comment on "Joint Ventures To Assist Global Car Manufacturers In Meeting China’s Electric Car Targets"

Leave a comment

Your email address will not be published.