Draft Guidelines for Auto Using New Energy Sources

China has issued draft regulations to guide production of vehicles using new sources of fuel, encouraging auto makers to enter the growing market.

China's National Development and Reform Committee issued more than 15 guidelines last week and has invited expert opinions and comment on how best to develop alternative-fuel vehicles.

Auto makers from home and abroad must have government approval to produce new-energy vehicles in China, the draft said.

They must meet all the requirements, including holding their own core technology, list their research and development capability, and make their models meet national standards on gas emissions and oil consumption.

China will also form a committee with experts from national science and technology departments to standardize the technology regulation and offer suggestions to boost development of greener cars.

According to the draft, new-energy vehicles include hybrid-electric vehicles, fuel-cell vehicles, and battery-electric vehicles. It also includes models that use alternative fuels excluding gasoline, diesel, natural gas, liquid petroleum gas and ethanol.

The draft came after a spate of auto makers announced ambitious plans to roll out new-energy vehicles amid soaring oil prices as well in the interests of environmental protection.

"Such regulation aims to encourage auto makers to increase their research and development of new technology to meet the growing market demand," said Jia Xinguang, former chief analyst fr om China National Automotive Industry Consulting and Development Co.

"But it is also lifting the threshold for them to enter new markets and prevent special policies from being abused."

China offers financial incentives for vehicle manufacturers and research institutes, including interest-free loans to support the development of new-energy vehicles.

"The new rule will benefit those car makers which are dedicated to the new technology," Jia told journalist.

Last year, record high oil prices dragged down the demand for gas-guzzling models and caused a sales slump and profit decline for the world's major auto makers.

As demand grows for cleaner, safer and more fuel-efficient vehicles, overseas firms have formed partnerships to share costs and speed development, not only to ease the national reliance on oil but also to lead the market in the future.

The Chinese government is encouraging auto makers to develop more new-energy vehicles to improve the technological capability of its own auto industry after cooperating with global players for the past 10 years.

At least 10 more auto makers are working on new-energy vehicles, which are expected to hit the roads within three to five years.

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