China's 20 millionth new energy vehicle rolls off the assembly line in Guangzhou, capital of Guangdong province on July 3, 2023, marking a new milestone for the country's NEV sector. (PHOTO: XINHUA)

By CHEN Chunyou

Developing new energy vehicles (NEVs) is one of China's commitments to combat climate change and promote sustainable development. After years of development, NEVs have become a new calling card for China, with ongoing government support providing a solid foundation for the prosperity of the NEV industry.

At a State Council executive meeting held on June 2, Premier Li Qiang stressed the importance of NEVs, as they represent the primary focus of the automobile industry's transformation and upgrading, offering significant development potential.

However, there are some urgent challenges to be addressed, which hinder NEVs' further development nationwide, such as the power battery's insufficient adaptability in low-temperature conditions.

According to a news briefing held on June 21 by the State Council Information Office, China will strengthen the support on the R&D of power batteries that could adapt to all-weather conditions, so as to meet the needs of consumers in high-altitude and cold regions, while developing cutting-edge materials to protect against thermal runaway, to improve the safety of NEVs, said Xin Guobin, vice minister of industry and information technology.

Moreover, the recycling of electric vehicle batteries was also stressed, where industries and academic institutions can deepen technological cooperation to expand the value of battery materials.

In addition, the country would also promote the applications of NEVs in key areas. In cities, the proportion of electric vehicles is to be improved in such fields as public transport, logistics, and sanitation. Meanwhile, to expand the rural market of NEVs, automobile enterprises are encouraged to develop more car models applicable in rural regions, such as heavy trucks, to activate rural consumption potential.

To cater to the rapid development of the NEV industry and meet increasing charging needs, a guideline, released on June 19 by the General Office of the State Council, proposed to build a well-structured charging network before 2030.

The guideline specifically vowed to improve coverage of charging piles in old and new residential communities, parking lots, gas stations, tourist attractions and expressway service areas, while phasing in charging infrastructure in rural areas.

Of particular note, to further boost domestic sales in this sector, China has extended its tax exemption policy for NEV purchases until 2027, which was initially set to expire in 2023, according to a plan jointly released by the Ministry of Finance, State Taxation Administration, and Ministry of Industry and Information Technology.

Vice Minister of Finance, Xu Hongcai, said a tax deduction for purchasing eco-friendly vehicles is expected to amount to 520 billion RMB (72.3 billion USD) from 2024 to 2027. This will create a more stable environment for consumers and manufacturers, and allows them to invest in and embrace the transition toward green transformation.