Automakers are sitting up and taking notice of a recent announcement from China’s Xin Guobin, the country’s vice minister of industry and information technology. Guobin has made it known that China is putting into effect a timetable to end all sales of fossil-fueled vehicles in the country.
Unsurprisingly, this announcement has caused the stock of related industries to skyrocket. Global X Lithium & Battery Tech ETF stock rose 5% on Monday. Global X is the company behind FMC Corp., Samsung SDI Co., and Tesla Inc. BYD, China’s largest electric vehicle maker, gained 7.2% in Hong Kong trading. Likely any company supplying lithium batteries and other raw materials is likely to see a surge in profit from here on out.
“The growth of the electric vehicle market has just completely changed the entire equation for lithium,” said Global X’s Jay Jacobs. “If China is going electric, and other automobile manufacturers and countries are following suit, this is just going to be an electric vehicle world going forward.”
China, the world’s second-biggest economy—and its biggest emitter of greenhouse gas—is one of several countries moving toward an all-electric-vehicle world. Great Britain, France, and India are setting similar goals.
The timeline for China remains somewhat vague but is likely to have a significant impact not only on the environment, but also on the up-and-coming Chinese auto industry. Likely it will be tied to China’s plan to cap carbon emissions by 2030.
As a hugely impactful economic force, China’s decision will no doubt affect the economies of countries all over the world. While electric cars have been in production for years, China’s plan could be the tipping point for the industry.
“The most important driver is not just environmental, it’s economic,” said Bloomberg New Energy Finance’s Sophie Lu. “Chinese regulators see the success of Tesla and other Californian companies and want to promote the same success amongst Chinese car manufacturers.”