(Yicai Global) May 17 -- China's southern island province of Hainan has rolled out a new car-buying restriction policy to promote new-energy vehicles as it aims to kick fossil-fueled vehicles to the curb.
Buyers will need to enter a lottery or auction in order to pick up a license plate for a petrol or diesel vehicle, according to a document published by the local government. The new process came into effect yesterday, making Hainan the first entire province to limit purchases of traditionally-fueled vehicles, but the ninth Chinese region behind centrally-run municipalities and major cities like Beijing, Shanghai and Guangzhou.
"We didn't expect restrictions for personal cars to come so soon," Cui Dongshu, secretary-general of the China Passenger Car Association, told Yicai Global. He pointed to data from the National Bureau of Statistics, which puts Hainan, the nation's smallest province, at the bottom of national rankings for car ownership.
Hainan Governor Shen Xiaoming announced at the Boao Forum for Asia on April 9 that the province would use only NEVs by 2030, making it the first Chinese region to set a timetable for scrapping petrol and diesel cars. The transition was expected to begin with government vehicles before extending to public transport and then to private cars.
Days later, the central government unveiled guidelines to support Hainan in widening reforms and opening up, and proposed turning the province into a free trade zone and port. The plans also suggested controlling the number of vehicles on the road to reduce congestion and promote the use of NEVs.
There were less than a million cars on the road in Hainan in 2016, far less than major cities, such as Beijing, Tianjin and Shanghai, Cui said. As the province only sells around 100,000 fossil-fueled vehicles a year, he doesn't expect the restrictions to have a massive market impact, but believes they could bolster NEV sales as the province aims to try and sell 500,000 a year.
Editor: James Boynton