The Beijing Municipal Commission of Transport in February issued an action plan describing how to switch out IC-powered light commercial vehicles in urban areas.
The city government will subsidize fleet companies switching out 20 gasoline or diesel powered vehicles to battery-powered cargo vehicles one time before Aug. 31, 2021. The government will issue city passes to fleet companies on more favorable terms than ICE powered cargo vehicles.
There will be a government transportation center to monitor every battery-powered vehicle on operating range, GPS, etc., in case someone embezzles government subsidy.
Source: Trucks 360 Read The Article Beijing Municipal Commission of Transport Read The Article
PSR Analysis: According to the China Statistical Yearbook 2020, the light commercial vehicle (below 4.5 tones) population nationwide is around 20 million units, among which Beijing metro area represents about 390,000 units. This is the big picture we need to bear in mind when we are looking at the municipal government’s policy.
Beijing, as the capital of the country, always leads other cities in emission upgrades. Considered that other cities like Hangzhou, Shanghai and Shenzhen are also implementing similar local measures, this likely will soon become a national policy.
A key takeaway of the plan is that the city is encouraging any fleet running over 20 LCVs to switch to battery-powered LCVs before 8.31.2021. The ultimate goal is to phase out 390,000 light commercial vehicles currently running in the metro area. A bigger goal is to set up an example for the rest of the country by starting to phase out the 20 million LCVs currently running in the country.
This policy, compared to the “10 cities, 1000 buses” policy of 11 years ago, has a much bigger impact on the ICE industry. If it comes true, all the major components suppliers will need to face the challenge. What will they do if the LCV market volume shrinks in the years to come? We are not going to wake up and see LCVs run on battery all over the city, but we will see them more and more on streets and stores. Much like the climate, it changes in a slow, yet monumental way. PSR
Qin Fen is Business Development Manager-China for Power Systems Research
