Emission of carbon dioxide from vehicles has been one of the main reasons of air pollution and perhaps global warming. As the result of the continuously increasing population and economic growth, the demand for cars is increasing as well. In Canada, each Canadian household has 1.5 cars on average. Given the fact that the condition of our environment is worsening, it pushes the invention of new sustainable technologies. Compared to conventional vehicles, plug-in hybrids and electric vehicles will emit significantly less or even no carbon dioxide which can bring remarkable improvements to our environment.
Shenzhen, a city with the fastest growing rate in China, has recently introduced a new regulation on new vehicle purchases. The government of Shenzhen placed restrictions on car purchases and limits the amount of vehicles from other provinces from entering downtown areas of Shenzhen during specific hours of a day as well. The purpose of this action is to control the number of cars on the road and damage of air pollution.
The new law brings advantages to electric cars oriented companies, such as Tesla. Due to the strict restrictions put on gasoline-based vehicles, many customers have altered their attention to electric cars. However, there is an interesting phenomenon about people from nearby cities starting to purchase more vehicles as they are concerned about the implementation of the new policy will be in effect in their cities shortly after. Moreover, whether these restrictions will actually affect people’s behaviors in terms of vehicles’ purchase is still unknown.
Additionally, one potential result derived from the policy might even have negative impacts on the environment. Shenzhen government only issues 80,000 car-purchase permits annually and they can only be acquired either through lottery or auction. This would decrease the willingness of lower income families from replacing their old vehicles to more environmentally-friendly ones. As for the richer people, they can simply bid for more in the auction to obtain the permits.
In conclusion, it is pleased to see that people are raising awareness of the problem of climate change and governments are taking actions to prevent the problem from intensifying. As a matter of fact, at the time I was writing this blog, Guangzhou, a city located in southern China, is actually snowing for the first time in history!
mollyh
April 8, 2016 — 7:16 pm
Hey Jas, great read. I think that government regulation was a positive step for the environment. I also agree with you about the negative implications about lower income families not being able to afford to participate in the auctions in order to upgrade to a electric car. I think this new regulation should involve some type of sharing economy model, in which allows middle and lower class consumers to be able to use electric cars when they need them.
ChaoranZhang
April 10, 2016 — 11:20 pm
Hey Jas, I admire you saw the first recorded snow in tropical China this January!!
I definitely agree on you comments that the government’s restriction towards car purchases has a positive effect on both customer behavior and the environment aspect.
This is definitely no doubt that the government control and implementing the certificate, regulation and legislation to be more green can protect the environment more effectively. But also vehicle brands should implement an appropriate positioning strategy in order to influence consumer behavior in purchasing to more sustainable.
Specifically, a leading brand not only should offer high quality of customer service and products, but should also translate to customers what is relevant in today’s world and what they conduct to perform a better duty to be more sustainable. Therefore, to become more green along with maintaining the status of proving premium quality products and services, an appropriate positioning strategy is necessary for these vehicle brands especially for the well-known brands to guide and monitor itself. In other words, a sustainability program that is consistent with a brand’s positioning will create value for corporates by creating more value.