5/14/2014 | 1 MINUTE READ

China Seeks to Slow Petroleum Demand

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China's daily consumption of gasoline has zoomed from 900 barrels per day in 2004 to about 2,200 bpd last year, according to the U.S.

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China's daily consumption of gasoline has zoomed from 900 barrels per day in 2004 to about 2,200 bpd last year, according to the U.S. Energy Information Administration. To slow growth in consumption, the country aims to hike the required average fuel economy of cars to 34 mpg by 2015 and 47 mpg by 2020.

The country also plans to invest about 93 billion yuan ($15 billion) to promote new-energy vehicles (NEVs) over the next 10 years.

EIA reports that China plans to spend 2 billion yuan ($324 million) to foster NEV production. National incentives for electric-car buyers run as high as 60,000 yuan ($9,600) from the central government with matching funds from cities that may reach 120,000 yuan ($19,300) per vehicle. Some cities also exempt NEV buyers from license plate quotas and auctions that can drive up the price of a tag to nearly that of the vehicle itself.

China had hoped that such incentives would enable it to put at least 5 million NEVs on the road by 2020. But with fewer than 40,000 electrics currently in use, the government has trimmed its 2020 target to 1 million units. Analysts say even that target may be too optimistic.

EIA says the lack of enthusiasm for electrics is due to an inadequate charging infrastructure, lack of a national standard for charging connectors and consumer worries about driving range.