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More foreign carmakers are starting to show an appetite for China's growing new-energy vehicle (NEV) market, but experts warned that their expansion in this segment may face a bumpy road as the sector's growth is strongly influenced by government policies such as subsidies.
Japan-based Nissan Motor Co has announced plans to invest 60 billion yuan ($9.5 billion) in China over the next five years with its joint-venture (JV) partner as it strives to become a top three producer in the world's biggest auto market, Reuters reported on Sunday.
Essential for such a push is Nissan's electrification plan, with the company's JV with Dongfeng Motor Group to launch as many as 20 models of NEVs in an effort to sell about 700,000 units a year by 2022. The Nissan plan involves all-electric battery vehicles and hybrids.
China released a policy in September 2017 in which it set a target of having 8 percent of automakers' sales be battery electric or plug-in hybrid vehicles by 2018, rising to 10 percent in 2019 and 12 percent in 2020. Automakers are trying to offer more electric and plug-in hybrid vehicles over the coming years, in part to comply with the production quotas for such cars.
German carmaker Mercedes-Benz said together with its partner, Beijing-based BAIC Motor, that it will make China the first country outside of Germany to build Mercedes-Benz electric vehicles and batteries with Chinese cells.
"By 2019, the EQC, a battery-powered sport utility vehicle, will start rolling off the assembly lines at our BBAC plant in Beijing," according to a statement the company sent to the Global Times Monday.
Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, said almost all major carmakers rolled out agendas to boost output of NEVs as well as sales to meet China's quota requirements.
"The seemingly large figure mentioned by Nissan is not really that impressive, given the industry consensus that NEV sales will explode in the next few years," Zhang said.
Although a large number of Western carmakers have announced plans to shift away from cars powered by traditional internal combustion engines, many of the non-traditional cars mentioned by these giants don't strictly qualify as NEVs - the all-electric or plug-in hybrids - being promoted by the Chinese government.