Beijing sends NEVs to the countryside

Beijing is doubling down on the largely untapped rural market for new energy vehicles (NEVs).

On Wednesday, five departments – including the macro planner (NDRC) and industry regulator (MIIT) – issued a notice calling on local governments to release policies that support NEV sales.

From May through year-end, local policymakers should:

• Formulate new NEV policy support (like trade-ins) in concert with key market actors (e.g., manufacturers, charging companies)
• Set up local NEV exhibitions and other promotional events

Some context: China's rural residents number over 500 million – more than the entire EU or US populations.

Get smart: Beijing's lack of specificity in telling local officials what they can and can't do is intentional.

• Given the failure of central policies to open the rural market, and the significant demand differentiation across China's many rural localities, Beijing wants officials to implement locally-oriented solutions.

Get smarter: Despite incredibly low prices, NEVs still haven't penetrated the rural market.

• Poor infrastructure and consumer tastes are the two biggest barriers to overcome – and will take a long time to shift.
• That means rural NEV sales won't skyrocket this year – but it also means generous policy support to build out the rural NEV market will likely continue for years to come.