JV equity cap phasing out

China announced its plan in April to phase out the equity cap on automotive joint ventures by 2022, seen as one of the most far-reaching moves in the car industry. The 50 percent cap on foreign equity, put in place in 1994, was removed this year for companies that produce new energy vehicles and special-purpose vehicles. The National Development and Reform Commission, China's top economic planner, said the limits will be scrapped for commercial car producers in 2020 and for passenger car producers starting in 2022. Foreign carmakers will be allowed to have more than two Chinese joint ventures as well, beginning in 2022.