China urges state agencies to prioritise electric vehicle purchases

The Chinese authorities have taken steps to support electric vehicle manufacturers by directing administrative bodies at all levels, along with party and state institutions, to increase their use of new energy vehicles.

The government has mandated that the share of new energy vehicles in annual vehicle purchases must be at least 30 per cent, Caliber.Az reports via Russian media.

Moreover, the price of purchased official vehicles should not exceed 180,000 yuan ($25,200). Furthermore, authorities will promote the installation of charging stations for electric vehicles.

Kelvin Lau, an analyst at Daiwa Capital Markets Hong Kong Ltd., notes, "Similar policies are already in place in some regions, and their expansion will be a positive factor that increases demand for mid-range vehicles, including brands like BYD and Leapmotor." 

Share prices of Chinese electric vehicle manufacturers saw a strong increase during trading in Hong Kong on October 29. NIO Inc. shares surged by 9.8 per cent, while Zhejiang Leapmotor Technology Co. Ltd. rose by 3.5 per cent. XPeng Inc. saw a gain of 2.6 per cent, and BYD Co. Ltd. climbed by 0.8 per cent.

American Depository Receipts (ADRs) of Chinese automakers have declined following a spike in the previous session. NIO shares fell by 2.2 per cent, XPeng dropped by 4.4 per cent, and Li Auto Inc. saw a decrease of 3.1 per cent.

It remains unclear from Beijing's guidelines whether the new recommendations apply solely to vehicles produced by Chinese companies or to all electric vehicle manufacturers operating in China. Tesla Inc. shares are experiencing a 1 per cent decline during trading.

By Naila Huseynova