Category: Industry News

VW reportedly in talks to use Huawei software in its cars in China

Volkswagen is one of the top-selling car companies in China, but it is lagging behind local carmakers in the country's NEV market.

(Image credit: CnEVPost)

Volkswagen has been in talks to use Huawei software in its cars in China, hoping to boost its efforts to gain a bigger share of the country's electric vehicle (EV) market, a Financial Times report said today.

Three people familiar with the situation said Volkswagen has spoken with Huawei about using the latter's technology in its cars, while another person said the German carmaker has held similar talks with other Chinese groups, according to the report.

Volkswagen is one of the top-selling car companies in China, but it lags behind local carmakers in the country's new energy vehicle (NEV) market.

In the January-April period, Volkswagen's joint venture in China, FAW-Volkswagen, sold 509,774 units at retail, up 1.4 percent from a year earlier, and came in second with an 8.6 percent share, according to the China Passenger Car Association (CPCA).

BYD sold 702,608 vehicles during the period, up 79.2 percent year-on-year, and ranked first with an 11.9 percent share.

Volkswagen's other joint venture in China, SAIC Volkswagen, sold 338,673 vehicles at retail from January to April, down 2.7 percent year-on-year, and ranked fifth with a 5.7 percent share.

In the NEV segment, BYD ranked first with a 38.1 percent share from January to April, while was second with a 9.6 percent share.

The NEV sales of Volkswagen's two joint ventures were not in the top 10 of the January-April list published by the CPCA. The No. 10 on the list is , with 33,529 units sold from January to April and a 1.8 percent share.

In July 2020, Volkswagen founded software company Cariad under former CEO Herbert Diess, but earlier this month it removed almost all of Cariad's top executives from their positions.

The Financial Times report cited a person familiar with the talks between Volkswagen and the Chinese companies as saying the discussions reflected how big the problem is for a group like VW, whose unique selling proposition is their scale and platforms.

Another person said Volkswagen is also aware that a Chinese software partner could appeal to Chinese customers who favor local suppliers and are obsessed with stories of technological self-reliance.

Although its software is seen as lagging behind some local players in China, Volkswagen is one of the most aggressive of foreign car companies seeking change.

Last October 13, Horizon Robotics, one of the leading providers of computing solutions for smart vehicles in China, announced that Cariad would form a joint venture with it to accelerate its efforts to develop smart driving technology locally.

Volkswagen plans to invest about 2.4 billion euros for a 60 percent stake in the joint venture, which is expected to close in the first half of 2023, according to a statement from Horizon Robotics.

VW to invest €2.4 billion to form JV with Chinese firm Horizon Robotics

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China issues policy to support NEV consumption in rural areas

A government document voices support for NEV development in rural areas in terms of NEV purchases, charging infrastructure development, and consumer education.

China issues policy to support NEV consumption in rural areas-CnEVPost

(Image credit: CnEVPost)

China has released a new government document to support new energy vehicle (NEV) consumption in rural areas, after NEV penetration in major cities climbed to high levels.

China's National Energy Administration and economic planner National Development and Reform Commission (NDRC) issued the document on supporting the development of NEVs in rural areas for provincial and municipal governments and two grid operators, State Grid and Southern Grid. The document, dated May 14, was made public on May 17.

China has built the world's largest charging infrastructure, providing a strong guarantee for the rapid development of NEVs, but there are still problems in rural areas, including insufficient public charging infrastructure, which restricts the release of NEV consumption potential there, the document says.

The advanced construction of charging infrastructure and optimization of the environment for the purchase and use of NEVs are of great significance in promoting NEV consumption in rural areas, according to the document.

The document voices support for NEV development in rural areas in terms of NEV purchases, charging infrastructure construction, and consumer education.

Car companies are encouraged to develop more economical models for consumers in rural areas, especially products including new energy cargo-carrying mini-vans, mini-trucks and light trucks.

China will improve the evaluation system for used NEVs and encourage companies to provide quality vehicles for rural areas.

The country will increase the proportion of NEVs in business vehicles and encourage local governments to increase the use of NEVs in public transportation, road passenger transportation, rental cars, law enforcement, sanitation, and logistics.

Local governments are encouraged to provide consumption voucher support for local rural residents to purchase NEVs, offering trade-in incentives for them to phase out low-speed electric vehicles and purchase regular NEVs.

Credit support for auto consumption in rural areas will also be increased, and financial institutions are encouraged to reasonably determine the down payment ratio, loan interest rate, and repayment period on the premise of risk control.

In terms of charging infrastructure construction in rural areas, local governments should accelerate the construction of charging stations and strive to achieve charging piles in every township.

Local governments are encouraged to promote the construction of centralized public charging stations, and places with conditions such as gas stations should also promote the construction of charging piles.

Existing residential communities in rural areas are encouraged to carry out charging facility construction, and a certain percentage of public charging spaces should be allocated.

Before 2030, China waives the electricity capacity charge for centralized charging and battery swap facilities with a two-part tariff, and relaxes the investment efficiency constraint for grid companies in the construction of distribution grids.

China encourages research on technologies such as two-way interaction between electric vehicles and the grid (V2G), and explores the construction of integrated charging infrastructure in rural areas where the utilization rate of charging piles is low.

In terms of consumer education, China supports local governments and industry bodies to enhance consumer acceptance of NEVs and alleviate purchase and use concerns through a number of activities.

China passenger NEV retail drops 3.6% MoM to 527,000 in Apr, CPCA data show

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Great Wall Motor’s Haval brand launches 2 new PHEVs to regain lost ground in SUV market

The Haval brand was for a long time the top-selling in the SUV market in China, but with the rapid growth of the NEV industry, it has lost its dominance to BYD.

Great Wall Motor's Haval brand launches 2 new PHEVs to regain lost ground in SUV market-CnEVPost

(Haval Xiaolong Max. Image credit: Haval)

Great Wall Motor's Haval brand was the top-selling SUV brand in China for a long time. However, with the rapid development of the new energy vehicle (NEV) industry, its dominance was replaced by BYD.

Now, the auto giant based in Baoding, Hebei province, has launched two new plug-in hybrid electric vehicles (PHEVs) in an attempt to regain its glory in the SUV market.

Haval launched the Xiaolong line of plug-in hybrid SUVs at an event yesterday, offering two models, the Haval Xiaolong and the Haval Xiaolong Max.

The Haval Xiaolong is a compact SUV with a length, width and height of 4,600 mm, 1,877 mm and 1,675 mm, respectively, and a wheelbase of 2,710 mm.

It is available in three versions starting at RMB 139,800 ($20,100), 149,800 and 156,800 respectively.

Great Wall Motor's Haval brand launches 2 new PHEVs to regain lost ground in SUV market-CnEVPost

(Haval Xiaolong.)

The Haval Xiaolong is powered by an engine with a displacement of 1.5 L and a front-mounted electric motor. The drive system has a maximum power of 185 kW and a maximum torque of 375 Nm.

The three models are available in 2 pure electric range versions, the lowest priced version with an NEDC range of 52 km and the other two with 110 km. Their fuel consumption per 100 km at WLTC conditions is 2.4 L, 1.39 L and 1.39 L respectively.

The Haval Xiaolong Max is a mid-size SUV with a length, width and height of 4,758 mm, 1,895 mm and 1,725 mm, respectively, and a wheelbase of 2,800 mm.

The vehicle is also available in three versions, with starting prices of RMB 159,800, 169,800 and 179,800 respectively.

The Haval Xiaolong Max comes standard with Great Wall Motor's Hi4 hybrid system unveiled on March 10, powered by a 1.5 L engine and dual front and rear electric motors, with a combined maximum system power of 205 kW and maximum torque of 585 Nm.

The car has an NEDC pure electric range of 105 km, a WLTC range of 83 km and a fast charging power of 33 kW.

Great Wall Motor's Haval brand launches 2 new PHEVs to regain lost ground in SUV market-CnEVPost

Both models seem to be aimed at competing with BYD's Song series, with the Haval Xiaolong targeting the market for the Song Pro DM-i series and the Haval Xiaolong Max for the Song Plus DM-i series.

For comparison, the BYD Song Pro DM-i has a length, width and height of 4,650 mm, 1,860 mm and 1,700 mm respectively, and a wheelbase of 2,712 mm.

The car is available in 2 battery range versions with NEDC electric range of 51 km and 110 km respectively, and the starting price is RMB 140,800.

The BYD Song Plus DM-i has a length, width and height of 4,705 mm, 1,890 mm and 1,680 mm respectively, and a wheelbase of 2,765 mm.

The car is available in 2 battery range versions with NEDC electric range of 55 km and 110 km respectively, and the starting price is RMB 154,600.

Haval was once the market leader in SUVs in China, with its Haval H6 being the best-selling SUV for many years.

Great Wall Motor's Haval brand launches 2 new PHEVs to regain lost ground in SUV market-CnEVPost

But in the past couple of years, with the rapid growth of China's NEV industry, BYD's Song series has replaced the Haval H6 as the best-selling SUV.

With 174,422 retail sales in China from January to April, the BYD Song series was the best-selling SUV during that period, up 76.5 percent from 98,809 units in the same period last year, according to data released earlier this month by the China Passenger Car Association (CPCA).

For comparison, the Haval H6 retailed 63,682 units from January to April, down 25.9 percent from 85,986 units a year ago, placing it fifth in the best-selling SUV sales rankings.

($1 = RMB 6.9525)

Full CPCA rankings: Top-selling models and automakers in China in Apr

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Prominent economist suggests China ban fuel car sales in 5 years

Independent economist Ren Zeping has suggested that China introduce a timetable to ban the sale of fuel cars within five years and have regions south of Hebei actively develop the new energy sector.

(Image credit: CnEVPost)

A prominent economist is proposing that China should ban the sale of conventional fuel cars within five years, sparking widespread discussion on social media.

Independent economist Ren Zeping said on Weibo today that he suggested China introduce a timetable for a ban on fuel cars within five years and for the region south of Hebei to actively develop the new energy sector.

He hinted that this is a move China needs to make to reach its carbon peak and carbon-neutral targets, as well as to expand domestic demand.

The words have generated a lot of discussions, with many opposing voices in the Weibo comments section, some of whom say that fuel car production and sales could also expand domestic demand.

Ren used to work for China's national think tank, as chief macro analyst at Guotai Junan and chief economist at Evergrande Group. He is currently an independent economist and has set up his own studio.

China does not currently have a national timetable for banning fuel cars, although the southernmost province of Hainan did so last year.

A carbon peak implementation plan released by the provincial government on August 22, 2022, said that by 2030, the sale of fuel cars will be completely banned across Hainan.

By then, vehicles in Hainan's public services and operations will be fully powered by clean energy, except for special uses, the plan said, adding that 100 percent of new and replacement vehicles in the private sector will be new energy vehicles (NEVs).

The document does not specify, though in China, NEVs generally refer to pure electric vehicles, plug-in hybrids and fuel cell cars.

China previously set a goal of seeing NEVs contribute 25 percent of all new vehicle sales by 2025, but that goal was met ahead of schedule last year.

For the full year 2022, China sold 5.67 million new energy passenger vehicles at retail, contributing 27.6 percent of all passenger vehicle retail sales of 20.54 million units, according to the China Passenger Car Association (CPCA).

In April, China's retail sales of new energy passenger cars were 527,000 units, with a penetration rate of 32.3 percent.

By December 2025, NEVs will account for more than 80 percent of all new vehicle sales in China, Li Xiang, founder, chairman and CEO of (NASDAQ: LI), said on April 24.

Ren has previously posted bullish comments on China's NEV industry, saying on December 31, 2021, that the NEV industry will be the most promising replacement for the real estate, heavy industry and chemical sectors as the most important engine of growth for China's economy.

The NEV industry was growing at a rate of several times, bringing a fast-growing penetration rate, while taking into account the market size of the industries associated with it, a large number of fuel vehicles will be replaced by NEVs in the next decade or longer, he said at the time.

China's Hainan to completely ban sales of ICE vehicles by 2030

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New auto index launched in HK stock market with constituents including BYD, NIO, XPeng, Li Auto

The Hang Seng Indexes Company Limited launched the Hang Seng Automobile Index today with a year-to-date return of about 9 percent.

A new index is now available for investors who wish to track the performance of the Chinese auto industry chain in the stock market.

The Hang Seng Indexes Company Limited (HSI) today announced the launch of three new indices, including the Hang Seng Automobile Index.

"The Hang Seng Automobile Index aims to reflect the overall performance of companies that are engaged in the value chain of automobile production, and are listed in Hong Kong," the description on the HSI website reads.

The new index -- calculated and disseminated in real-time at two-second intervals -- had a return of 9.26 percent for the year to last Friday. As of press time, the index was up 0.69 percent today.

The Hang Seng Automobile Index has a fixed component of 30 stocks and will be reviewed every six months.

The index's current constituents include car companies such as BYD, NIO, , , Leapmotor, , Great Wall Motors, and GAC Group, as well as suppliers such as LK Technology and Fuyao Glass.

The description page on the HSI website does not provide information on the weighting of these constituents in the index.

The index has a base period of December 31, 2019, with a base value of 3,000 points and is currently quoted at 3,272.24 points.

At press time, NIO was down 2.3 percent to HK$63.60 in Hong Kong, XPeng down 2.03 percent to HK$38.55, Li Auto down 0.96 percent to HK$113, BYD was flat and Leapmotor was up 1.47 percent to HK$34.55.

Hang Seng Automobile Index

Stock CodeConstituent Name
A SharesB SharesH SharesRed ChipsOthers
1958BAIC MOTOR
9888BIDU - SW
710BOE VARITRONIX
1211BYD COMPANY
285BYD ELECTRONIC
489DONGFENG GROUP
3606FUYAO GL ASS
2238GAC GROUP
1772GANFENG LITHIUM
175GEELY AUTO
2333GREATWALL MOTOR
179JOHNSON ELEC H
148KINGBOARD HLDG
9863LEAPMOTOR
2015LI AUTO - W
558LK TECH
425MINTH GROUP
1316NEXTEER
9866NIO - SW
1478Q TECH
20SENSETIME - W
3808SINOTRUK
2382SUNNY OPTICAL
819TIANNENG POWER
9696TIANQI LITHIUM
3898TIMES ELECTRIC
2338WEICHAI POWER
868XINYI GLASS
9868XPENG - W
1585YADEA

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Chinese LiDAR maker Hesai opens its 1st European office in Germany

This will help it further expand into the European market and accelerate its globalization, Hesai said.

Chinese LiDAR maker Hesai opens its 1st European office in Germany-CnEVPost

(Image credit: Hesai)

Hesai Group has opened its first European office in Stuttgart, Germany, which will help it expand further into the European market and accelerate its globalization, the Chinese LiDAR manufacturer announced today.

Stuttgart is the automotive capital of Europe, with more than 2,000 companies in the automotive chain and many top OEMs and large Tier 1 suppliers headquartered here, Hesai said.

More than 20 automotive industry-related universities and R&D institutions provide a large talent base for the automotive industry in the region, it said.

Hesai's European office will leverage local resources in automotive and component manufacturing to enhance the company's presence and overall competitiveness in the European market, Hesai said.

Chinese LiDAR maker Hesai opens its 1st European office in Germany-CnEVPost

(The building where Hesai's European office is located. Image credit: Hesai)

The company received the TISAX AL3 assessment label, the highest level of information security, this year, passing the European automotive supply chain access requirements and being able to serve European car OEM customers, it said.

Founded in Shanghai in late 2014, Hesai initially focused on developing high-performance laser sensors and has been exploring LiDAR products since 2016.

Hesai opened an office in Palo Alto, Silicon Valley, at its inception and now operates in more than 40 countries and 90 cities worldwide.

The company went public on NASDAQ on February 9, becoming the first Chinese LiDAR manufacturer to go public in the US.

Hesai shipped 47,515 LiDAR units in the fourth quarter, up 739.2 percent from 5,662 units in the same period in 2021, it said in its earnings report on March 16.

The company shipped 80,462 LiDARs for the full year 2022, up 467.5 percent year-on-year.

Hesai's revenue in overseas markets over the past three years reached nearly RMB 1.19 billion ($170 million), accounting for more than half of the company's total revenue.

($1 = RMB 6.9520)

Hesai unveils ultra-thin LiDAR ET25 that can be placed behind windshield

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China NEV sales down 2.6% MoM to 636,000 in April, CAAM data show

Irrational promotions in China's auto market since March have led to consumer wait-and-see, so auto consumption is still in a slow recovery process, the CAAM said.

China NEV sales down 2.6% MoM to 636,000 in April, CAAM data show-CnEVPost

China's new energy vehicle (NEV) sales in April were 636,000 units, up 112.71 percent year-on-year, but down 2.6 percent from March, according to data released today by the China Association of Automobile Manufacturers (CAAM).

The CAAM's data are wholesale sales for automakers, where NEVs include battery electric vehicles (BEVs), plug-in hybrids (PHEVs) and fuel cell vehicles.

China sold 471,000 BEVs in April, up 103.7 percent year-on-year but down 3.9 percent from March.

China NEV sales down 2.6% MoM to 636,000 in April, CAAM data show-CnEVPost

PHEV sales were 165,000 units, up 144.5 percent year-on-year. Sales of fuel cell vehicles were 300 units, up 222.3 percent year-on-year.

All vehicle sales in China were 2.159 million units in April, up 82.7 percent year-on-year but down 11.9 percent from March.

China NEV sales down 2.6% MoM to 636,000 in April, CAAM data show-CnEVPost

This means that China's NEVs had a penetration rate of 29.5 percent in April, up from 26.6 percent in March.

China NEV sales down 2.6% MoM to 636,000 in April, CAAM data show-CnEVPost

Production of NEVs in China was 640,000 units in April, up 110 percent year-on-year, but down 5 percent from 674,000 units in March.

Production of all vehicles in China was 2.133 million units in April, up 76.8 percent year-on-year and 17.5 percent lower than in March.

China's auto production and sales saw a significant year-on-year increase in April, but this was mainly due to a low base in the same month last year, the CAAM noted.

Irrational promotions in the Chinese auto market since March have led to consumer wait-and-see, so auto consumption is still in a slow recovery process, the CAAM said.

In addition, production and sales in China's auto industry fell in April compared to March amid adverse factors including a slower-than-expected recovery in the commercial vehicle industry, according to the CAAM.

With the current downward pressure on China's economy increasing and aggregate demand still insufficient, the stable operation of the auto industry needs the support of effective policies, the CAAM said.

In April, exports of vehicles from China were 376,000 units, up 170 percent from a year earlier up and 3.3 percent from March.

Among them, the export volume of NEVs was 100,000 units, up 840 percent year-on-year, down 28.6 percent from March.

In January-April, China's auto sales were 8.235 million units, up 7.1 percent from a year earlier.

NEVs sold 2.222 million units in January-April, up 42.8 percent year-on-year, with a market share of 27 percent.

NEV demand in China expected to pick up in Q2, analysts say

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Gotion becomes VW’s designated battery supplier for markets outside of China

The purchase order involves LFP Unified Cell products with the same design style and specifications as those for the Chinese market for Volkswagen's full range of NEVs.

(Image credit: CnEVPost)

Gotion High-tech, a Chinese power battery manufacturer, has become a supplier to Volkswagen for the German automaker's overseas markets, furthering the partnership between the two.

Gotion's wholly-owned subsidiary Hefei Gotion High-tech Power Energy Co Ltd recently received a procurement letter from Volkswagen, making the company a designated supplier for the automaker's overseas markets, according to a stock exchange announcement on May 10.

This is the latest collaboration between Gotion and Volkswagen, which is its important backer, after becoming the designated production point for Volkswagen's NCM and LFP products in China in early 2022.

The purchase order relates to LFP Unified Cell products, which will be used in Volkswagen's models in markets outside of China.

These cells use the same design style and specifications as the Chinese market and are intended for use in Volkswagen's full range of NEVs, according to the announcement.

Volkswagen and Gotion have had a long-standing relationship, with a strategic cooperation framework agreement reached in July 2021 in which Gotion developed the first generation of Unified Cells for Volkswagen's regular production models in China.

In December 2021, Volkswagen China increased its stake in Gotion to 26.47 percent, making it the largest shareholder of the Chinese battery maker.

Unified Cells can significantly reduce costs by adopting a unified design standard and are expected to cover 80 percent of Volkswagen's models in the future, according to Gotion's press release.

In early 2022, Gotion was awarded the official production point for Volkswagen China's NCM and LFP Unified Cells. In February this year, the company won the Volkswagen Cell Test Lab qualification.

In addition, construction of a high-nickel NCM material project built by Volkswagen's private placement has begun in Lujiang, Hefei, and is expected to go into production this year, Gotion said in the press release.

The 20GWh Volkswagen Unified Cell project in Xinzhan, Hefei, has almost completed the main workshop and supporting buildings and is expected to start production in the second half of this year, Gotion said.

Gotion is one of the largest power battery makers, with 2.9 GWh installed in the first quarter, ranking 8th globally with a 2.2 percent share, according to data released earlier this month by South Korean market research firm SNE Research.

Global EV battery market share in Q1: CATL 35%, BYD 16.2%-CnEVPost

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SAIC-GM-Wuling takes page from NIO’s book to make its Mini EV even more affordable

SAIC-GM-Wuling is allowing consumers to pay only for the vehicle body and rent the battery when they buy the Mini EV, lowering the purchase threshold to RMB 19,800 ($2,860).

SAIC-GM-Wuling takes page from NIO's book to make its Mini EV even more affordable-CnEVPost

(Image credit: SAIC-GM-Wuling)

SAIC-GM-Wuling is taking a page from NIO's book by allowing consumers to buy only the vehicle body and rent the battery when they buy its hot-selling Hongguang Mini EV, even though the model doesn't support a simple battery swap like NIO models.

The automaker offers this purchase option for five versions of the Hongguang Mini EV, with the lowest-priced version costing consumers an initial payment of just RMB 19,800 ($2,860) and a monthly battery rental of RMB 198 for five years thereafter.

Under the regular purchase option, this version of the Hongguang Mini EV is priced at RMB 32,800.

Of the other four higher-priced versions, two of them have a vehicle body price of RMB 29,800 and the other two are RMB 33,800, with battery leasing prices ranging from RMB 198 to RMB 558.

Hongguang Mini EV price under battery rental

ModelHongguang Mini EV QingsongHongguang Mini EV Macaron ShishangHongguang Mini EV Macaron ZhenxiangGameboy WanleGameboy Wanle
Range120 km120 km170 km200 km300 km
Retail Price (RMB)32,80043,80049,80055,80067,800
Vehicle Body Price (RMB)19,80029,80029,80033,80033,800
Battery Rental (RMB)198198298358558
Battery Rental Term5 years5 years5 years5 years5 years
Final Payment (RMB)1,9800000

This is similar to the battery rental service BaaS (battery as a service) offered by NIO, except that NIO owners who choose to purchase a car based on BaaS do not get ownership of the battery unless they pay a one-time fee to buy it out.

The cheapest NIO model is currently the ET5 sedan, which costs RMB 328,000. For consumers who choose to purchase based on the BaaS plan, the price will start at RMB 258,000 and the monthly battery rental fee will start at RMB 980.

NIO initially did not allow battery buyouts for BaaS-based car owners, but launched the service in April 2022.

Under NIO's plan announced at the time, vehicle owners will be allowed to terminate their BaaS lease agreement if they decide to back out.

These users will be able to get a brand new battery at the NIO service center, and in the case of a standard range battery pack, they will have to pay RMB 70,000 for the pack and a service fee of RMB 3,000.

If it is a long-range battery pack, then the cost includes RMB 128,000 for the battery and RMB 3,000 for the service fee.

SAIC-GM-Wuling is a joint venture between SAIC Group, General Motors and Liuzhou Wuling Automobile, headquartered in Liuzhou, Guangxi Zhuang Autonomous Region, southwest China.

It sells vehicles based on the GSEV (Global Small Electric Vehicle) architecture in China, including the Mini EV, KiWi EV, Nano EV and Air EV. In addition to these pure electric models, SAIC-GM-Wuling also sells fuel-powered SUVs, MPVs and vans.

It is one of the largest NEV makers in China, but sales in the first four months were down from a year ago.

From January to April, SAIC-GM-Wuling sold 111,604 NEVs, down 15.9 percent from 132,658 units in the same period last year, according to data released yesterday by the China Passenger Car Association (CPCA).

That makes SAIC-GM-Wuling the only one of the top five manufacturers of NEV sales in China to see a decline in sales of such models.

($1 = RMB 6.9338)

Full CPCA rankings: Top-selling models and automakers in China in Apr

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China allows 6-month sales extension for some ICE models based on existing emissions standard

China will implement the China 6b emissions standard on July 1, although some models will be given a six-month sales transition period.

China allows 6-month sales extension for some ICE models based on existing emissions standard-CnEVPost

(Image credit: CnEVPost)

Chinese authorities confirmed in an official document that a new emissions standard will go into effect on July 1 as scheduled, but provided an additional six-month sales period for some internal combustion engines (ICE) vehicles based on the existing standard.

In a joint announcement issued today, five ministries, including China's Ministry of Industry and Information Technology and Ministry of Ecology and Environment, said that China will implement the China 6b emissions standard nationwide starting July 1, when the production, import and sales of vehicles that do not meet the standard will be banned.

For some of the models with "monitoring only" results in the Real Driving Emissions (RDE) test report, they will be given a six-month sales transition period until December 31, 2023, according to the announcement.

The move is to implement the requirements of the China 6 emissions standard, as well as China's policy to stabilize and expand vehicle consumption, the announcement said.

China released the final rule for Stage 6 light-duty vehicle emission limits and measurement methods (China 6 standard) in December 2016, a new standard that combines best practices from European and US regulatory requirements.

The standard is being implemented in two phases, with the 6a standard already taking effect on July 1, 2020, and the 6b standard coming into effect on July 1, 2023.

In March, price wars were the most talked about topic in China's auto industry, and the impending entry into force of the 6b standard was seen as an important factor.

On March 23, China's Auto Dealers Chamber of Commerce (CADCC) called on regulators to delay the start of implementation of the China 6b emissions standard.

Since the beginning of the year, the CADCC has received feedback from many auto dealer groups that they are under significant pressure to survive the impending full implementation of the China 6b emissions standard.

A study covering nearly 100 dealership groups showed that nearly 98.89 percent of them strongly recommended that China delay implementation of the China 6b emissions standard until January 1, 2024, the CADCC said at the time.

Notably, following the release of the latest announcement, the China Association of Automobile Manufacturers (CAAM) said in an article on its website that the new policy would help the Chinese auto market recover steadily.

Since the release of the China 6 standard, most car companies have been developing and producing products in accordance with the standard, which amounts to an early implementation of the China 6b standard, the CAAM said, adding that to date, more than 95 percent of light-duty vehicles have met the China 6b standard.

As of the end of January, there were more than 1.89 million vehicles in stock in China that did not meet the RDE requirements, and if purchased parts are included, then there are more than 2 million such vehicles in stock, the CAAM said.

The CAAM submitted a proposal for a six-month sales transition period for light-duty vehicles with "monitoring only" RDE test results to ease the difficulties faced by China's auto industry, according to the article.

"We hope that after the release of the policy, companies will uphold the principle of fair market competition, plan their layout rationally and complete the switchover and sale of their products as soon as possible," the CAAM said.

China's transition to new emission standard: How will this affect auto market?

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