China mulling ban on petrol and diesel vehicles

China wants to ban gas and diesel cars

China is the world's largest vehicle market, which gives every change in its policy a huge impact on the global industry.

Xin Guobin, China's vice industry minister, said it had started "relevant research" but that it had not yet decided when the ban would come into force, BBC reports.

The United Kingdom has pledged a ban on new diesel and petrol vehicle sales by 2040.

Will China become the next country to ban conventional diesels and petrols?

An index tracking new-energy vehicles makers shot up almost 4 per cent early on Monday to a 14-month high, having gained over 20 per cent this year. However, if the world's largest market were to join the party, things would change significantly - and that's precisely what seems bound to happen.

As well as moving to satisfy the demands of changing markets, Germany wants to ban sales of such vehicles by 2030, while the United Kingdom and France have pledged to to do the same by 2040.

China made 28 million cars previous year, nearly a third of the world's total production.

Speaking with Bloomberg, the vice-president of an EV start-up called Nio, Zhang Yang, said the promise of a future ban on fossil fuel cars will give the country's auto industry a much-needed shake-up.

Warren Buffett-backed BYD led the pack in sales in the first seven months of this year, delivering 46,855 electric and plug-in hybrid vehicles, according to the China Passenger Car Association. However, the news boosted stocks in China's new energy auto firms.

China has attempted a sharp pivot away from coal in recent years, banning imports at certain ports and suspending mine development in efforts to curtail pollution and potentially restructure its energy system.

There are indications that China is setting a deadline for automakers to end sales of fossil-fuel-powered cars in the country soon.

In 2015, Chinese motorists bought 336,000 electric and hybrid cars, representing 40 percent of global sales. But for now, the Chinese government didn't define a target date, as done by both France and the UK.

Xin said any resistance to change will mean "turbulent times" for auto companies in coming years.



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