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Shenzhen requires new ride-hailing vehicles to be fully electric, starting in December

China is looking for alternative measures to boost the EV sector after cutting subsidies.

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Shenzhen, a southern city in China’s Guangdong province, issues a new policy on Tuesday that requires all newly-registered cars for online ride-hailing services to be fully electric vehicles (EVs), according to a regulation posted on the city’s government website. The new regulation measure will take effect since December 1.

This new move comes as many Chinese cities are seeking to phase out gasoline-fuels vehicles in an effort to cut down car emissions and air pollution. Wuhan and Zhengzhou have announced regulations this year that only electric vehicles would be registered for ride-hailing while southwestern city Kunming started implementing a similar policy from January.

Currently, 17 ride-hailing companies in Shenzhen have obtained permits to launch services while 10 of them have operated formally, according to Shenzhen government website. The city has a total of 58,000 vehicles registered for ride-hailing as a complement to taxis.

Other measures are also included in the new policy. Ride-hailing companies are required to transparently present to customers the pricing rules and the number of available vehicles within a three-kilometer radius based on the user’s location. Also, the retention period for data stored by the ride-hailing companies will be extended from two years to three years in order to protect user rights.

The new regulations could signal that Chinese local governments are now counting on the ride-hailing business to boost the EV sector during the post-subsidy era, as the market has seen a continuous decrease for the past few months.

The sales of new energy vehicles (NEVs) in China, including fully EVs, hybrid EVs, and fuel cell vehicles, have slumped further for a fourth consecutive month in October, dropping 45.6% year-on-year to about 75,000 units, according to figures from China Association of Automobile Manufacturers.

The Chinese government announced in June that national subsidies for NEVs will be phased out by the end of 2020. Subsidies were cut by over 50% the same month.