China announced today that carmakers who want to produce fossil fuel-powered cars must first obtain a new energy vehicle score by producing zero-emission and low-emission cars, as first reported by Bloomberg. The new rule applies to automakers who make or import over 30,000 fossil fuel cars a year.
Carmakers need to meet the following quotas: by 2019, at least 10 percent of the cars they make must be electric, and by 2020, at least 12 percent must be electrical. If a carmaker doesn’t have enough credits, they will then need to buy them or face fines.
China, which experiences significant air pollution, especially visible in the smog-filled cities of Beijing and Shanghai, is eager to phase out fossil fuel cars. The country joins the likes of France and the UK, both of which are planning to ban fossil fuel car sales by 2040.
China had originally planned an outright ban on the sale and production of traditional cars, which analysts had deemed “overly ambitious,” according to Bloomberg. This new move strikes a compromise, allowing carmakers time to react to the change.
Honda, which plans to sell an electric car in China next year, said in a statement that it will work toward reaching the electric car quotas, according to Bloomberg. Other companies in China, including Chinese domestic carmakers, already have a stake in making electric cars and are set to benefit from the new quota by starting off with extra credits.
For years, carmakers have talked about the growing relevance of China. And while most automakers aren’t writing off the importance of the US customers, China is now the world’s biggest car market, so that’s why foreign carmakers like Honda are quick to obey the new rule.