(Yicai Global) Nov. 3 -- China has revised downward its sales target for new energy vehicles to 20 percent of all car sales by 2025, as it starts to lift its foot off the peddle and let the industry develop more in line with market dictates.

Electric car sales should account for 20 percent of all vehicle sales by 2025, according to the New Energy Vehicle Industry Development Plan (2021-2035) released by the country’s cabinet yesterday. The figure given in an earlier draft was 25 percent.

The previous goal of producing two million NEVs in 2020 was almost impossible to achieve, said Wu Hui, general manager of the research department at the China Yiwei Institute of Economics. This new goal is just for reference, the actual number will depend on how carmakers and the industry develop.

High targets put pressure on finance, taxation, companies and the market, Yu Qingjiao, secretary general of the Zhongguancun New Battery Technology Innovation Alliance, told Yicai Global. It is better to leave the market to control itself. Too much administrative intervention is not conducive to the healthy development of the industry in the long term, he added.

In the next five to 15 years, the industry will see more market-oriented development with less influence from government policies and plans, Wu said.

"China was one of the first countries to promote zero-emission travel. It has built up advantages in the industrial chain and markets, while other countries still stand on the starting line,” Yu said.

“The industry is expected to bid farewell to high growth in the next few years and enter a stage of low-to-medium growth but high-quality development,” he said.

As companies focus more on quality, branding and technological innovation, China should be able to maintain its leading position in the face of future intense competition in the global NEV market,” he added.

Other Targets

The government has dropped the goal of sales of smart connected vehicles reaching 30 percent of all car sales, and the construction of wireless communication networks that support intelligent roads, according to the new plan.

It is also proposing providing financial assistance for the construction of public charging piles and is encouraging local governments to increase support for public transport and ridesharing, as well as introduce preferential policies for the parking and charging of NEVs.

It is calling on companies to accelerate their integration into the global value chain and promote international exchanges and cooperation. This goes hand in hand with China’s general trend of opening up to the West, Wu said. In terms of automobile intelligence, however, there is still a big gap between China and overseas markets, he added.

Editor: Kim Taylor