According to new draft regulation published yesterday, the Chinese government is mulling the expansion of the current new-energy vehicle subsidies to 2020, up from the current expiration date set for the end of next year.
The measures designed to support the new energy vehicles, China’s generic term for “green” autos that span from plug-in hybrids to battery and fuel cell electrics, are the latest policy effort from the central authorities as the country battles the growing threat of pollution and snarling traffic. The subsidies, though designed to be gradually toned down during the period from 2016 to 2020, according to the draft rules seen on the Ministry of Finance’s website, might represent a great asset to companies that produce such models, such as BYD Co., China’s largest producer of electric cars.
According to the new draft rules, customers that purchase an EV car can initially be eligible for subsidies of up to 55,000 yuan ($8,834), and buyers of pure-electric buses will be awarded as much as 500,000 yuan. The government has restricted the incentives to locally manufactured green vehicles, ruling out imports from the likes of BMW, Tesla and Nissan. Manufacturing of new-energy vehicles in China has increased five times since the start of 2014 but the sales are far away from being on pace to reach the government’s goal of having 5 million new-energy vehicles on the road by 2020.
Via Automotive News