Huge cuts on way for green car subsidies
Print Edition
CHINA is to reduce subsidies for new energy cars by 20 percent in 2017-2018 and 40 percent in 2019-2020 compared to figures for 2016, the Ministry of Finance said yesterday, despite the nation being far from its green car deployment goals.
The cuts are double the amount the authority was considering last December.
Last year, subsidies were reduced by 5 percent from 2013’s figure while they were cut by another 10 percent this year.
Next year’s maximum subsidy will be 55,000 yuan.
The subsidy program is due to end in 2020, Minister of Technology Wan Gang said previously.
A firm believer in the market, he has long been calling on carmakers to make the technology more affordable as the age of hefty subsidies would not last for ever.
At the annual National People’s Congress in March, he said the number of new energy vehicles had surpassed 120,000 units by the end of 2014, nowhere near the country’s targets of 500,000 such cars on the road by 2015 and 5 million new energy cars by 2020.
The dilemma facing new energy cars is that batteries are still too expensive for long-distance travel and that is affecting their popularity and hampering the development of economies of scale.
Carmakers, especially the international giants, are counting on their production of traditional cars to offset the extra costs of making new energy cars.
Volkswagen, for example, can electrify nearly every model in its range without drastically altering its existing production lines. Its ambition is to introduce 20 new energy models to China, most of them plug-in hybrids, by 2018 and start local production next year.
Rival General Motors will bring more than 10 new energy models to China in the next five years and localize one plug-in hybrid each year through its joint venture, Shanghai General Motors.
The plug-in hybrid is more flexible for long-distance travelling and less demanding on charging facilities, which are currently scarce.
BMW, whose lineup includes the i3 electric car, the i8 electric sports car, the 5 series plug-in hybrid and the Zinoro 1E electric SUV, yesterday delivered 1,000 cars to the eHi rental company.
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