‘Cleaner air? Give us clearer policies,’ China’s electric car bosses say

FILE PHOTO: A staff member hooks up a charging cable to EV at a charging station in Liuzhou. China is aggressively investing in New Energy Vehicles to tackle urban smog. (Reuters)
Updated 20 March 2018

‘Cleaner air? Give us clearer policies,’ China’s electric car bosses say

SHANGHAI: Delegates to China’s annual meeting of parliament have urged the state to provide more policy clarity for the electric car industry and overhaul a local government subsidy program they say has distorted the market.
China is aggressively pushing new energy vehicles (NEVs) not only to cut pollution in congested cities but also as a strategic industry that will help boost its firms’ global presence. It is now moving to make producers more competitive by phasing out subsidies.
But industry figures said in proposals submitted during this year’s National People’s Congress (NPC) that the state still must tackle “protectionist” local governments that dish out extra subsidies and draw up preferential policies aimed at excluding rivals.
“Although policy direction at the national level is clear, there are still factors at local government level that do not benefit the development of the NEV sector or the establishment of a fair, competitive market,” said Wang Fengying, CEO of China’s Great Wall Motor and a delegate with Hebei province.
She said local governments were using subsidies to protect their own firms rather than stimulate the sector as a whole, and local governments were also adjusting technological standards to shut out rivals.
NPC delegates also called for more consistent guidelines, nationwide technological standards for batteries as well as cars, and a more finely tuned system of incentives.
Current subsidies focused on production, rather than consumption, were counterproductive, some delegates said.
China manufactured 794,000 NEV units and sold 777,000 in 2017, both the world’s highest and up more than 50 percent on the year. Total NEV ownership in China reached 1.8 million, more than half the global total.
Executives said the future of the industry will hinge on improving performance and driver convenience, with battery life, recharging speeds and the availability of recharging stations among the major concerns.
They urged government to raise technological thresholds and create incentives to improve battery range. Policies were also needed to encourage NEV sharing and to grant electric vehicles preferential road access to make them more attractive to consumers.
Preferential policies to encourage cleaner electric vehicles are not unique to China, with the US and Norway also offering a wide range of subsidies and incentives, such as tax credits for buyers or exemptions from road toll and car registration charges.
But in China, intense regional competition means that provinces go the extra mile to encourage production.
Forced to abandon heavily polluting industries, China’s regions have turned to clean, state-backed sectors such as electric cars for alternative sources of growth.
Heilongjiang in the northeast was one of several provinces
lobbying for more support for its NEV industry this year, saying it would help revive China’s
old rustbelt region. Anhui in eastern China also called for support to establish a NEV innovation center.
But industry delegates said progress has been impeded by regional efforts to promote local NEV champions.
“The long-term existence of different types of local protectionism leads not only to low-quality and redundant production but also inefficient, wasteful investment,” said delegates from Anhui led by Zhou Fugeng, senior engineer with Jianghuai Automobiles.
“It also severely reduces consumer choice, fragments the market, inhibits innovation and deviates from the state’s original intentions to develop NEVs,”
they said.
China’s subsidy cut is seen as a crucial test of the industry’s ability to stand on its own feet, but Wang of Great Wall Motors said state financial support needed to be targeted more effectively.
“A clear requirement is that local governments should not provide subsidies for car purchases, and should convert them into subsidies for usage,” she said.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: