Chery denies improper subsidy claims on eco-friendly cars

SHANGHAI: Chinese automaker Chery on Saturday denied assertions that it had improperly claimed government subsidies for environmentally friendly vehicles.

An audit by the Ministry of Industry and Information Technology disqualified declarations by Chery and BYD for a combined US$53mil (RM225.5mil) lion in government subsidies for thousands of vehicles sold in the five years to 2020, accounting for nearly 60% of such improper claims.

Chery denied its declarations were improper.

It said in a statement it had previously consulted the authorities about the challenges of missing receipts because the cars were sold more than five years ago and that the government had advised the company to declare the cars for the ministry to determine if they should be qualified.

"Our company has truthfully reported to the authorities we did not collect certificates for end sales; there's no fraudulent act," Chery said in the statement.

The government's assertions do not include allegations of fraud.

EV maker BYD did not respond to requests for comment.

The audit, initiated earlier this year to verify subsidy applications over the five-year period, disqualified 21,725 vehicles for subsidies as it found discrepancies such as failure to submit required supporting documents or to meet the mandated mileage thresholds, according to the documents published by the Ministry of Industry and Information Technology in June.

Chery had 7,663 vehicles disqualified - 19 for mileage thresholds and 7,643 for not providing certificates.

The audit documents did not lay out any penalties or mention reimbursement.

The government has previously said automakers will have to repay subsidies for vehicles found not to have met mileage requirements.

Chery said the audit covered declarations for subsidies that were not prepaid and thus automakers did not need to repay.