On the surface e-bike manufacturers are furious about this of course and people generally aren't happy about this. You need to take into consideration though that this is already a standard they established 10 years ago, and they're just re-stating it. Often that's how things go here, they crack down on one law or the other for a short time and then it becomes relaxed again. While it's different than the way we do things in the west and you may not agree, doing so does send a very clear message. You can read what you want into that last part, I'm not going to go into further detail - I am living here after all.
You also need to realize that after the backlash from this proposal, the government also revealed that they will allow local districts to decide whether to enforce this law or not.
There is a huge portion of the population in Shanghai that ride e-bikes in the city center that ride e-bikes and that's no exaggeration. As you've all probably gathered by now, e-bikes are a very common form of transportation in China. Every day on my way to work, the roads are flushed with bicycles and e-bikes and it appears that over half of those bikes are bikes that would be found in violation of this law. Take these factors into consideration:
1. The courier industry depends on these e-bikes that exceed these limits - such as those that deliver food goods, your typical UPS services, etc. etc.
2. Almost all the people who ride these bikes are not affluent people who can afford to buy a car. The average monthly salary for a Shanghainese is 3,292 yuan, or 482 USD.
3. This law would make all those bikes that exceed those limits bump up a category to become "ji dong che", which basically means that they are road vehicles equivalent to motorcycles and then would therefore need motorcycle licence plates.
4. Motorcycle licence plates can be converted into car licence plates after 8 years of ownership and therefore are considered to possess nearly the same amount of value as a car licence plate.
5. Car licence plates have fixed the value of motorcycle plates at the equivalent of 40,000 yuan or 5,850 USD.
6. Shanghai has placed restrictions on the number of motorcycle licence plates available. At the end of last year there wasn't any up for grabs.
This then leaves a *large* chunk of the inner-city population to either:
a) purchase a motorcycle licence plate (if there are any available) at 5,850 USD while earning a monthly wage of 482 USD
b) offload their only means of transportation (and make the whole reason for this law to reduce lead battery trash irrelevant) and take up public transit.
I'll leave it up to you to guess how likely this is going to be.
In the end it is highly likely that Shanghai will not allow people to register e-bike licence plates that exceed these standards (as they always have according to the 10 year old standard), but I'd point out that you probably won't go wrong with registering in the outlying cities (as most locals have always done).