China's government appears to be going electric. New reports suggest the government is going to mandate that at minimum 30 percent of all government vehicles purchased by 2016 must be electric.
The move is an effort to cut the rising pollution facing many Chinese cities, as well as to reduce energy use.
According to reports, the government in Beijing has called on all government ministries and agencies to look into purchasing the "new-energy vehicles" for use on the roads. That label includes electric vehicles, plug-in hybrids and fuel-cell cars, and is part of the ultimate goal of pushing China into the realm of alternative energy.
It comes as China also announced that it would waive a 10 percent purchase tax for "new-energy vehicles."
According to a statement (translate) on the central government's website, the ratio of gasoline cars versus alternative energy ones will increase beyond 2016, when local provinces are required to meet the target.
"This is a laudable aspiration," said Yang Song, a Hong Kong-based analyst at Barclays, who estimates that government purchases made up less than 10 percent of total new vehicle sales in China. "Government purchases are not growing as fast as private consumption. So just to rely on the government purchase would be a challenge."
It should also be a boost for Tesla, which hopes to enter the Chinese market in earnest, but is facing a trademark dispute over its naming rights in the country. Once resolved -- and analysts fully expect the electric car manufacturer to get into the market -- it could be a great selling point for the company when attempting to make headway into the world's largest market.
With Beijing viewing electric vehicles as a major strategic point for the country's future as a means of reducing air pollution, the move would also help end its reliance on fossil fuels and would cut into the layers of smog over the country's cities, which have reached hazardous levels. Going the electric route seems smart and doable considering the number of resources China is willing to push forward in this decision.
