China Renews Subsidy Program for EVs, Excludes Hybrids image

Struggling to reduce air pollution, China has renewed the subsidy program for EVs, but not for hybrids.

The government will offer $9,800 (60,000 yuan) for the purchase of an EV and 500,000 yuan for an electric bus, according to the National Development and Reform Commission and finance, science and industry ministries.
Fuel-cell vehicles, powered by hydrogen, are included in the program for the first time and qualify for 500,000 yuan in rebates.

China did succeed in reaching its own target of having 5 million EVs by 2020 due to increased prices for such vehicles and also concerns regarding the lack of charging stations and safety. At the end of 2012 there were only 27,800 EVs in China. Industry Minister Miao Wei tried to convince the government that it should consider adopting a massive promotion of fuel-efficient vehicles and hybrids.

“The new policy is basically the same as the previous one and doesn’t really address the underlying problems,” said Han Weiqi, an analyst with CSC International Holdings Ltd. in Shanghai. “Unless there are follow-up measures to step up support for hybrids, today’s policy is not expected to spur the EV market.”

The government also wants local authorities to have more than 30% of new-energy vehicles manufactured by car makers based outside their jurisdictions and encourages public agencies to become the leaders in adopting the use of alternative-energy vehicles.

Source: Bloomberg