Chinaʻs new energy vehicle mandate policy (final rule)

China finalized its New Energy Vehicle (NEV) mandate in September 2017. The NEV mandate is a modified version of Californiaʻs Zero Emission Vehicle (ZEV) mandate, with goals of promoting new energy vehicles and providing additional compliance flexibility to the existing fuel consumption regulation. It applies only to passenger cars and will formally take effect April 1, 2018. The rule establishes NEV credit targets of 10% of the conventional passenger vehicle market in 2019 and 12% in 2020. Each NEV sold generates some number of credits, depending on characteristics such as electric range, energy efficiency, and rated power of fuel cell systems. The final NEV market share achieved under the influence of the credit targets will therefore depend on the final fleet mix.