On October 25, the Beijing municipal government announced Alternative Fuel Vehicles purchase applications in 2015鈥檚 fifth round of small PV purchase application would be no longer be subject to the lottery and would all be given the green light. Beijing鈥檚 move follows that of Shenzhen, which lifted restrictions on electric vehicles on October 13, and is positive to China鈥檚 AFV industry, especially that of PVs.
Comments
Government lifts purchase restrictions on AFVs. At a September 29 meeting, the State Council standing committee decided to refine its AFV support policies and required the removal of all driving/purchasing restrictions on them. So far, the seven cities with purchase restriction policies, including Shenzhen and Beijing, have fully lifted their restrictions on AFVs.
Potential buyers of traditional autos in tier-1 cities will turn to AFVs. The purchase restrictions significantly checked automotive demand as was seen in Shenzhen, for example.
The absence of license restrictions plus low utilization costs and declining purchase prices driven by technological improvements could significantly boost household demand for AFVs. We believe there will be further increases in the license fee in the future.
