Since 2009, the Chinese government has implemented many policies to help develop the emerging energy automotive industry. They are subsidizing the industry and are giving incentives to any client who owns a new energy vehicle. There are several reasons behind this phenomenon.
1. It can strategically place China at the head of the New Energy Automotive market
In 2016, China’s vehicle sales reached 28 million units- the highest in eight years. However, the lack of strong core engine technology means China is still having a hard time making cars as efficiently as western companies, such as BMW. To avoid their problems in the engine industry, China is now switching its attention to the new energy vehicle industry, which requires no engines. This is a strategical move to place China as the leading country in this market and now it has taken off, new energy vehicles have captured the governments attention.
2. New energy vehicles provide a solution to an international energy crisis
As the availability of fossil fuels becomes smaller and smaller, the energy crisis has become a worldwide and imminent challenge. How can we use energy efficiently? What is the best energy to use? What is the most renewable energy? These problems have become a major focus of every country and because of this, the new energy vehicles are a one of the driving factors of the automotive industry. These vehicles require far less energy production than a traditional car and is reason that they are highly valued by China and the rest of the world.
3. A way to prevent the greenhouse effect and global warming
Vehicles are one of the main contributors to China’s pollution. Cars emit carbon dioxide, water vapor and carbon monoxide- three key gases responsible for the greenhouse effect and in turn, global warming. A positive outlook on the global warming crisis is that this emerging industry could help reduce this problem; all the new energy vehicles require is electricity. If China become a driver for this new energy industry, the environment will definitely benefit.
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