China Urges Expanding Charging Infrastructure and Popularizing NEVs in Rural Area

BEIJING, May 8 (TMTPOST) – The executive meeting of the State Council held last Friday reviewed and approved guidelines on accelerating the construction of charging infrastructure and providing better support for new energy vehicles in rural areas.

The meeting emphasized the need to proactively build charging infrastructure within a reasonable timeframe. It highlighted the importance of guiding enterprises to expand their sales and service networks, encouraging higher education institutions to train maintenance technicians, and optimizing policies to support the purchase and use of new energy vehicles. These measures aim to foster the healthy development of the rural new energy vehicle market.

The construction of charging infrastructure, particularly charging piles, is the key policy in the nation’s tool kit to promote the adoption of new energy vehicles. During the meeting of the Political Bureau of the CPC Central Committee on April 28, it was emphasized that the development of a modern industrial system driven by the real economy should be sped up. This includes consolidating and expanding the advantages of new energy vehicles and accelerating the establishment of charging piles, energy storage facilities, and other related infrastructure, alongside the necessary upgrades to the power grid.

Dong Qi, the chief macroeconomics analyst at Guotai Junan Securities, highlighted the significance of the Politburo meeting’s clarification on the key direction of building a “modernized industrial system supported by the real economy.” During the meeting, several key directions were outlined, with new energy vehicles being recognized as an “advantageous field” that requires the consolidation and expansion of its development advantages. On the other hand, charging piles, energy storage, and power grid transformation were identified as areas that need further improvement and attention, representing the relatively weaker aspects of the system.

Tong Zongqi, the deputy secretary-general of the China Electric Vehicle Charging Infrastructure Promotion Alliance, emphasized the pivotal role of charging infrastructure in facilitating the widespread adoption of new energy vehicles and the eventual replacement of traditional fuel vehicles. Despite the significant growth of the domestic new energy vehicle market in recent years, consumers’ primary apprehension remains the inconvenience associated with charging. Consequently, the government’s encouragement and support for the construction of charging infrastructure are crucial for advancing the development of new energy vehicles.

To meet the growing charging demand, the government has implemented several supportive policies. One notable example is the Opinion on Further Improving the Service Guarantee Capability of Electric Vehicle Charging Infrastructure released in January 2022, which outlines a target for the charging infrastructure to accommodate over 20 million electric vehicles by the end of 2025.

During its latest executive meeting, the State Council once again stressed the importance of a gradual and balanced approach to charging infrastructure construction, aiming to inspire active participation from various stakeholders. Specifically, for rural areas, the promotion of the “light storage and charging integration” model was highlighted. This model entails the installation of photovoltaic equipment to generate electricity, which is then stored in batteries for both household and electric vehicle charging purposes.

Regarding new vehicle purchases, the meeting put forth proposals to enhance the support for the purchase and utilization of new energy vehicles in the expansive rural market. The aim is to optimize existing policies, encouraging enterprises to diversify the supply of new energy vehicles, while simultaneously strengthening safety oversight. Notably, the meeting did not address any additional subsidy or stimulus measures.

In early 2023, the market witnessed a fierce price competition, prompting enterprises and industry associations to urge authorities to implement stimulus measures. Cui, however, advocates for a shift away from short-term stimulus measures. Instead, he suggests adopting long-term strategies to overcome the barriers hindering the widespread adoption of new energy vehicles and facilitate their transition into a fully market-driven phase.

According to Cui, the car market has shown signs of stabilization in April, with gradual recovery underway. The CPCA’s annual sales forecast target remains unchanged, aiming for a total of 23.5 million passenger cars sold, including 8.5 million new energy passenger cars. The projected annual penetration rate for new energy vehicles is expected to reach 36%.

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