The Ministry of Industry and Information Technology (MIIT) issued a circular on Aug 12 to seek opinions in modifying market access for new energy vehicle producers and their products, implying a rising bar and curb in “wild growth”.

Experts point out that a low market threshold can tolerate incompetent producers and security risks. Subsidies and heated local investment have fueled excessive industry growth.

Low cost, inferior quality and homogeneity begin to drive out good investments. From 2012 to 2015, models of new energy vehicles listed by MIIT increased from 639 to 3,411, but only 77 types reached 1,000 in production.

It is expected that 10 new auto producers will meet the new rule within two years after the new market access is introduced, and two-thirds of the existing 119 producers will meet the requirements after two years.

A rising market threshold will press players in the new energy vehicle industry to grasp core technologies and innovation, and focus on breakthroughs in batteries, electronic control, engines, and system optimization, said Zuo Shiquan, an expert from the China Center for Information Industry Development.