The Chinese government is considering relaxing the foreign equity limit for joint ventures (JVs) in the new-energy vehicle (NEV) sector and may start by launching a trial test in the country's free trade zones, news website caixin.com reported on Thursday, citing sources close to the matter.
A detailed plan may be unveiled in the second half of 2018, the report quoted one source as saying.
It is not clear yet what maximum share foreign companies would be allowed to have, said the report. Under the current regulations, Chinese automakers must hold at least 50 percent of the shares in NEV JVs.
There have been various indications that the new approach might be coming, the report noted. For example, Gao Feng, spokesperson for the Ministry of Commerce (MOFCOM), said at a press conference on September 21 that MOFCOM is cooperating with relevant government departments to reduce limitations that foreign companies face in investing in China's NEV sector.
The new regulations will be a boon for US-based NEV maker Tesla, which is reportedly in talks with the Shanghai government to set up a factory there. "Foreign car producers have concerns over technology protection when setting up JVs in China, and easing limitations would dispel their concerns," said the report.
This would not be the first time the Chinese government has relaxed regulations in the NEV sector. In June, the maximum number of JVs foreign NEV makers are allowed to have in China was changed to three from two, according to a document jointly released by the National Development and Reform Commission and the Ministry of Industry and Information technology.
