Toyota reportedly aims to set up a fourth hybrid vehicle battery plant in China as Beijing has shelved plans to completely do away with combustion engine cars and will look for a more balanced policy.

Why it matters: The move coincides with Chinese government plans to amend its new energy vehicle mandate to boost production of fuel-efficient hybrids.

  • Hybrid vehicles are grouped together with traditional gasoline vehicles in China and were therefore left out of NEV purchasing subsidies before.
  • Under current regulations, car manufacturers can meet environmental quotas by producing one electric vehicle for every 50 hybrids they make, according to a Nikkei report.

China refines NEV mandate policy to boost overlooked hybrid vehicles

Detail: Primearth EV Energy, Toyota’s battery-making unit, plans to complete the new plant by 2021 with an annual capacity of roughly 100,000 batteries.

  • Toyota runs one joint-venture factory in eastern China’s Jiangsu province producing 100,000 nickel-metal hybrid batteries, alongside another two that will soon enter production.
  • The company’s total capacity in the country will quadruple once the three new facilities come online.
  • The Japanese auto giant also eyes expansion into China’s booming all-electric vehicle market and could roll out its first batch of Toyota-branded models in partnership with BYD by 2025.

Context: China initially considered releasing an ambitious target completely banning national production and sale of petrol vehicles by 2030 as part of broader efforts to curb air pollution, but later put the plan on hold to avoid a one-size-fits-all approach on fuel vehicles.

  • China will not outlaw fossil-fuel-powered vehicles given the country’s complicated local environment and climate situations, said Wan Gang, a former Chinese science minister and high-ranking government policy advisor last month.
  • Beijing unveiled a timeline for ban gas cars in late 2017, when Xin Guobin, vice industry minister said that automakers in China should have a “thorough understanding of the situation and re-adjust their strategies.”
  • There are more than 240 million passenger vehicles in circulation in China, dwarfing the country’s 2.6 million electric cars as of last year, according to official figures.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: or Twitter: @yushan_shen

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