China plans to halt issuing new electric vehicle permits, sources say

China plans to halt issuing permits to produce electric vehicles because of concern additional approvals may lead to a glut in the world’s biggest auto market, according to people with knowledge of the matter.

The National Development & Reform Commission, which oversees new investments in the auto industry, wants to evaluate the programme after handing out 15 production licenses since March 2016, said the people, who asked not to be identified because the discussions aren’t public.

A suspension of new permits may delay plans by companies such as Internet entrepreneur William Li’s NIO and Jia Yueting-backed LeEco’s electric-car unit that have said they intend to apply.

China has identified new-energy vehicles as a strategic emerging industry and aims to boost annual sales of plug-in hybrids and fully electric cars by 10-fold in the next decade.

Besides giving generous subsidies for both consumers and manufacturers, the government created a class of permits allowing companies including billionaire Lu Guanqiu’s Wanxiang Group and a Volkswagen AG joint venture to produce only electric vehicles, while imposing a moratorium on new capacity for the manufacture of conventional gasoline-run vehicles.

The state support helped China surpass the U.S. in 2015 to become the world’s biggest market for new-energy vehicles -- comprising electric vehicles, plug-in hybrids and fuel-cell cars. A total of 507,000 such vehicles were sold last year in the country, according to the China Association of Automobile Manufacturers.