Background Analysis of the Rapid Development of China's New Energy Vehicle Industry

After a period of development and infiltration into life, people are no longer unfamiliar with new energy vehicles. New energy vehicles have gradually become an important choice for people when choosing cars due to their advantages such as low power prices and environmental protection. However, the development of China's new energy vehicle industry has only gone through a short period of more than ten years. In 2001, the research project on new energy vehicles was included in the "863" major scientific and technological project during the national "Tenth Five Year Plan" period. 2008 was the first year of new energy vehicles in China, with a sales growth of only 899 new energy vehicles throughout the year; By 2018, this number had reached 1.27 million vehicles: in just ten years, sales had increased by over a thousand times. So, what kind of background and environment has led to the rapid development of China's new energy vehicle industry?

New energy vehicles refer to vehicles that use unconventional vehicle fuels as their power source (or use conventional vehicle fuels or new on-board power devices), integrate advanced technologies in vehicle power control and driving, and form advanced technical principles, new technologies, and new structures. Generally divided into pure electric vehicles, extended range electric vehicles, hybrid electric vehicles, fuel cell electric vehicles, hydrogen engine vehicles, other new energy vehicles, etc.

Firstly, in the macro context, as countries around the world attach greater importance to environmental protection, technological progress, and energy security, the internal combustion engine that consumes fossil fuels is gradually being replaced by other energy power systems in the field of road transportation. This also brings good opportunities for the development of the new energy vehicle industry with electrification as the technical background. For example, as early as 1997, Japan established a development plan for clean energy vehicles in accordance with the Kyoto Protocol's goal of reducing carbon dioxide emissions; The subsequent Paris Agreement further demonstrated the determination of countries to control greenhouse gas emissions. By 2018, several countries, mainly members of the European Union, had made commitments to restrict or terminate the registration of internal combustion engine sales and even introduced laws. For example, France announced a ban on the sale of internal combustion engine vehicles in 2040, and the UK also decided to ban the sale of internal combustion engine vehicles in 2040. Some countries have stricter time requirements, such as Norway setting this time as 2025. In this context, the Ministry of Industry and Information Technology of China has stated that the timetable for the withdrawal of fuel vehicles has been studied, and the dual point management method has been implemented to demand and motivate enterprises to improve the energy-saving level of traditional vehicles.

Secondly, the sustained and powerful multidimensional policy incentive mechanism has promoted the development of the new energy vehicle industry. New energy vehicles, due to their inherent environmental friendliness and technological upgrading characteristics, have become an important lever for China's green development and innovative high-quality development. Therefore, the country has established a top-down four-dimensional incentive policy system in four aspects: national strategy, tax and fee reduction, financial subsidies, and industrial policies. In terms of national strategy, it is manifested as focusing on training at the policy level and actively expanding the scope of demonstration and promotion of new energy vehicles in the field of public services in many cities. In terms of tax and fee reduction, in 2014, a document was issued exempting the purchase tax of new energy vehicles, and in 2015, a document was issued granting preferential treatment to the vehicle and vessel tax of new energy vehicles. In terms of financial subsidies, we will launch a pilot program to subsidize private purchases of new energy vehicles and promote it nationwide, and provide certain annual financial support for new energy vehicle projects. In terms of industrial policies, multiple documents have been issued to promote the construction of charging infrastructure, increase the promotion of new energy vehicles, and provide subsidies for new energy operations.

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