China’s Ministry of Ecology and Environment announced that starting from July 1, the country will enforce enhanced emission standards for vehicles nationwide. This move will compel car manufacturers to sell off their existing inventory of older models before the new regulations take effect. The updated standards, known as National VI B emission standards, will prohibit the production, import, and sale of vehicles that do not adhere to the requirements. These standards include stricter guidelines for pollutants such as carbon monoxide emitted by both gas and petrol vehicles. The Ministry also mandates Real-Driving Emission (RDE) tests for vehicles while they are being driven on the road, a requirement absent in the current National VI A standards implemented since July 2020.
To accommodate the transition, the Ministry has allowed a six-month grace period for the sale of light vehicles that do not yet meet the RDE test criteria specified in the National VI B standards. The impending implementation of more stringent auto emissions standards has increased the pressure on automakers and dealers to sell off their non-compliant vehicle inventory, leading to aggressive discounts on these models, as noted by Fitch Rating analysts in March.
According to the China Automobile Dealers Association, which advocated for a grace period regarding the new standards’ impact on auto sales, there were approximately 2 million vehicles failing to meet the RDE test requirements by the end of March.