By the end of 2023, the "China VIb" emissions standard has been fully implemented, and the "China VII" emissions standard is entering its countdown phase for release. Although a specific timeline has not been announced, given the trend towards environmental protection, its arrival may not be far off.

Between 2000 and 2024, China has undergone five transitions in emissions standards. From "China I" to "China VIb," each upgrade in emissions standards has marked a significant shift in the automotive market. With continuous advancements in internal combustion engine technology and increasingly stringent environmental requirements, the release of the National Seventh Stage Motor Vehicle Emissions Standards (hereinafter referred to as "China VII") is imminent.

China VII is expected to be announced as early as 2025, with implementation by 2030

"The latest China VII standards are expected to be announced in 2025." This is a consensus among many automakers and relevant research institutions. Based on past trends, China has typically upgraded its emissions standards every three to four years, and 2025 coincides with this cycle.

There are indications to support this prediction. According to public information, on November 30, 2023, the State Council issued a notice announcing the issuance of the "Action Plan for Continuously Improving Air Quality," which explicitly states, "Research and formulate the next stage of motor vehicle emission standards and conduct research on new-stage fuel quality standards." The next stage mentioned here refers to China VII.

Furthermore, public information indicates that the Vehicle Emission Control Center of the Ministry of Ecology and Environment led the first pre-research phase for the National Seventh Stage Motor Vehicle Emissions Standards in October 2020. The second pre-research phase began in September 2022 and was completed in December 2023. As of March this year, China has commenced the third pre-research phase for the next stage of motor vehicle emission standards, signifying the official launch of related standard-setting work.

The current China VI emissions standards were released in December 2016 and comprise two emission limit schemes: China VIa and China VIb, implemented in 2020 and 2023, respectively. By the end of 2023, China VIb had fully taken over the market. By comparison, it is highly likely that the draft of China VII standards will be released for public consultation in 2025. The specific implementation date is expected to be around 2030, allowing automakers sufficient time to adapt.

Increased manufacturing costs may be inevitable

The reason for allowing automakers ample time to prepare lies in two main aspects. Firstly, the introduction of Euro 7 emissions standards was not successful, with most European automakers resisting them. Several EU member states, including Bulgaria, France, Hungary, Italy, Poland, Romania, and Slovakia, even strongly protested the implementation, demanding lower standards or delayed implementation.

In terms of timeline, it took China just 22 years to transition from the China I emissions standards in 2001 to the full implementation of China VIb in July 2023, while Europe and the United States took 30 years to achieve a similar transition.

To meet the stringent requirements of Euro 7 emissions standards, automakers need to upgrade key components such as engines, exhaust systems, and fuel systems. These upgrades involve complex engineering challenges and require significant investment in research and development, both financially and temporally. Therefore, automakers need sufficient time to overcome technical hurdles and ensure that their products meet emission performance standards. Additionally, given that China VIb has only recently been fully implemented, rushing to introduce China VII standards prematurely would be of limited significance.

Secondly, the current China VIb emissions standards already impose stringent requirements on automotive carbon emissions, comparable to some of the latest European Stage VII emissions standards. For example, China VIb limits nitrogen oxide (NOx) emissions to no more than 35 milligrams per kilometer for passenger cars, light buses, and vans, while Euro 7 standards require no more than 30 milligrams for M-category passenger cars and N-category light trucks. Similarly, China VIb limits particulate matter (PM) emissions to no more than 3 milligrams per kilometer for the same vehicle categories, while Euro 7 standards set the limit at 4.5 milligrams.

The relentless pursuit of tighter emission limits will undoubtedly drive up vehicle manufacturing costs. The European Commission, in its assessment report on the impact of Euro 7 standards, predicted that the manufacturing costs of cars and light commercial vehicles (vans) would increase by €180 to €450 (approximately RMB 1,370 to RMB 3,425), while costs for trucks and buses would rise by €2,800 (approximately RMB 21,307).

However, according to a recent study by Frontier Economics, an international research institution, the European Commission's predictions may be overly optimistic. In reality, the estimated cost per vehicle equipped with an internal combustion engine or diesel-powered truck and bus is expected to increase by approximately €2,000 (approximately RMB 15,220) and nearly €12,000 (approximately RMB 90,000), respectively, significant deviations from previous estimates. In China, where consumers are highly sensitive to car prices, the introduction of new standards will inevitably encounter resistance.

The increasingly stringent emissions standards aim to reduce harmful emissions from motor vehicle exhaust, such as carbon monoxide (CO), nitrogen oxides (NOx), and particulate matter (PM), thereby improving air quality, protecting public health, and achieving energy conservation and emission reduction goals. Notably, Euro 7 introduces minimum requirements for tire wear, brake particle emissions, and battery durability for purely electric and hybrid vehicles for the first time. Given that China's emissions standards are largely based on European standards, the upcoming China VII emissions standards may also impose specific requirements on electric and hybrid vehicles. In the future, new energy vehicles that do not meet the standards will face the risk of elimination.

In the field of new energy, China has led the world in the production and sales of new energy vehicles for eight consecutive years. According to the latest data from the Ministry of Public Security, as of the end of June 2024, China had 440 million motor vehicles, including 345 million cars and 24.72 million new energy vehicles, accounting for 7.18% of the total. Among the new energy vehicles, 18.134 million were pure electric vehicles, accounting for 73.35% of the total. According to data from the China Association of Automobile Manufacturers, pure electric vehicle sales grew by 2.6% year-on-year in July, while hybrid vehicle sales surged by 80.7%, outpacing pure electric vehicles by a staggering 31 times. Sales of hybrid vehicles have grown from less than 300,000 units at the beginning of the year to over 430,000 units in July, closing in on pure electric vehicle sales for the same period.

As the number of new energy vehicles continues to grow, China VII may also lead to increased vehicle operating costs and operational restrictions for consumers. Given the irreversible trend towards environmental protection, this presents another significant challenge for manufacturers who have just adapted to China VIb standards.

Note: This article was originally published in the "Industry Reports" section of the October 2024 issue of "Auto Industry Review" magazine. Please stay tuned.

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