China’s New Framework to Boost Hydrogen Fuel Cell Vehicles

The finance ministry of the People’s Republic of China has issued a notice about launching demonstration applications of fuel cell vehicles. The notice about new policies to support hydrogen fuel cell vehicles focuses on improving the country’s supply chain and technology.

Since 2009, China’s central government has been supporting the development of fuel cell vehicles by giving purchase subsidies to consumers. As of July 2020, China has promoted more than 7,200 fuel cell vehicles and built about 80 hydrogen refueling stations, according to China’s National Energy Administration.

The notice is a joint effort by the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Development and Reform Commission, and the National Energy Administration.

These five departments will adjust the subsidy policy to purchase of fuel cell vehicles and reward eligible city groups for the industrialization of key core technologies.

The demonstration period is set for four years.

The notice stated: “A healthy industrial chain requires reasonable allocation of resources and elements, effective coordination of technology, market, and policies, and can be formed through long-term joint efforts of all parties. The five departments will select eligible city clusters, rely on outstanding companies in the fuel cell vehicle industry chain to carry out demonstration applications, promote the sustainable and healthy development of the industry, and build a complete industry chain.”

The overall idea is to support the breakthroughs in key core technologies and industrial applications of fuel cell vehicles.

Cities that fall under the demonstration cluster would focus on technological innovation, identify application scenarios, and build a complete industrial supply chain. They are expected to build a fuel cell vehicle industry supply chain and promote technology research and development and industrialization of all links in the chain.

Demonstration city clusters should identify the lead city, clarify the division of tasks, strengthen communication, and coordinate demonstrations.

The policy also aims to promote the formation and development of a unified domestic market and accelerate the formation of a domestic fuel cell vehicle industry. This would include establishing and promoting demonstration city clusters, supporting enterprises to use the unified national market to become bigger and stronger, and accelerating product economics.

Another goal is to rely on the domestic industrial chain to accelerate the industrial application of key components. Through demonstration policies, companies that support complete vehicles and power systems would be encouraged to rely on the domestic industrial chain to actively use key components that achieve breakthroughs. Cities with outstanding companies in the industry chain can participate in multiple city clusters to prevent foreign companies from investing.

The policy is likely to strengthen vehicle management through information technology and build a test and evaluation standard system and safety guarantee foundation for industrial development.

The country will adopt a “post-subsidy” approach and approve and allocate reward funds based on the results of acceptance evaluation and performance evaluation.

The notice added that by November 15, 2020, the provincial finance, industry, and information technology, science and technology, development and reform, and energy authorities of the lead city should submit two application documents and demonstration application implementation plans to the five departments. The five departments will rely on third-party institutions and expert committees to track and guide the demonstration work throughout the process and implement control and milestone assessments.

Earlier this year, the Ministry of Finance of the People’s Republic of China had issued a notice on ways to promote financial subsidies for new electric vehicles. The ministry said it had given the order to support the new electric vehicle industry. It has highlighted a few areas of the subsidy policy for the new EVs that must be addressed.

Recently, Mercom reported that China-based BYD Company Ltd and Toyota Motor Corporation announced that the operation of their new company would be launched in 2020. The name of the new company will be called BYD Toyota EV Technology Co. Ltd. The company will be involved in the design and development of battery-run electric vehicles and their platforms and related parts. The equity participation of both companies is 50% each.