September 14, 2017 / 8:24 AM / in a year

Fitch: China Unlikely to Ban Fossil-Fuel Cars within 20 Years

(The following statement was released by the rating agency) HONG KONG/SHANGHAI, September 14 (Fitch) China is not likely to be able to achieve a complete ban of sales of conventional fossil-fuel-powered vehicles within the next 20 years, says Fitch Ratings. The agency expects new energy vehicles (NEVs), which will substitute conventional vehicles, to be increasingly popular in China, but believes the government's existing goal to increase the market share of NEVs to 20% by 2025, from 1.8% in 2016, will not be easily achievable. This is because government subsidies for NEVs are due to end after 2020 and bottlenecks in battery technology and charging infrastructure are likely to constrain widespread adoption of NEVs in the private sector. Mr. Xin Guobin, the Vice Minister of Industry and Information Technology, said at a recent forum that the Chinese regulators have started to study a timetable to end production and sales of conventional internal-combustion-engine (ICE) vehicles. Fitch views this as the Chinese government's response to the ambitious timetables set by other countries. In 2016, the Netherlands and Germany announced plans to ban sales of ICEs by 2025 and 2030, respectively. In mid-2017, India announced it would electrify all the vehicles for sale by 2030, and France and the UK set their deadlines at 2040. These timetables have been set to urge global automakers to accelerate development of electric vehicles (EV); but we believe the deadlines are likely to be extended because EV penetration in most of these markets is low. Sales of NEVs in China have been strong since 2014 and have made China the largest EV market in the world. Sales have been driven by supportive government policies, including generous subsidies, exemption of NEVs from license-plate restrictions in large cities, and wide public-sector deployment. However, growth may slow once government subsidies phase out by end-2020, which will reduce the economic attractiveness of NEVs relative to ICEs. In addition, given the sheer size and geographical variation of the Chinese automobile market, automakers are unlikely to be able to completely electrify all vehicles while meeting the diverse needs of Chinese consumers in the foreseeable future. China's NEV market is currently geographically imbalanced, with the majority of sales concentrated in top-tier cities, and dominated by low-end models. China's timetable will remain challenging, but we believe the Chinese NEV market is set to grow in the next decade as automakers have strong incentives to increase their NEV offerings in China under tighter fuel-economy regulations and the NEV credit scheme likely to come into effect in 2018-2019. This will likely result in a large increase in supply of low-end pure battery-driven EVs and plug-in hybrids from both Chinese proprietary brands and Sino-foreign joint-venture (JV) OEMs. In fact, a few global automakers have already taken the short cut to quickly boost their EV production volume in China by forming new JVs that focus on low-end EVs, such as Volkswagen-JAC, Ford-Zotye, and Renault-Nissan's cooperation with Dongfeng Motor Group. For more details of Fitch's views on China's NEV market, please refer to the China New Energy Vehicle Blue Book: Government Policy Drives Market Development, published on 16 July 2017. Contact: Jing Yang Associate Director +86 21 5097 3017 Fitch Ratings (Beijing) Limited, Shanghai Branch 3401, 34/F, Shanghai Tower, No. 479, Lujiazuihuan Road Shanghai 200120, China Yee Man Chin Director +852 2263 9696 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: Additional information is available on ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below