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  Chinese Premier Li Keqiang
 
Beijing, eyeing capacity glut and emissions, to limit permits for plants to build gasoline-powered vehicles
Automotive News China | 2016/10/11

Chinese Premier Li Keqiang said Saturday that the government will not approve any applications by newcomers to the auto industry that want to produce gasoline-powered vehicles in China.

The restriction would not apply to established automakers that want to expand output.

Li made his remarks to the State Council during a discussion of possible measures to curb excess production capacity in various industries.

In 2015, automakers in China had the capacity to produce 31.3 million vehicles a year, according to the government. That figure includes 25.8 million passenger vehicles and 5.5 million commercial vehicles. 

In 2015, 24.5 million vehicles were produced in China, up 3 percent from 2014. The number includes 21.1 million passenger vehicles and 3.4 million commercial vehicles.

By the end of this year, the auto industry's production capacity will rise by an additional 6 million units.

But even as the government limits output of gasoline-powered vehicles, it continues to encourage EV production.

In 2018, Beijing will introduce a carbon cap-and-trade mechanism to encourage the sale of battery-electric cars, plug-in hybrids and fuel-cell powered vehicles.

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