A sign is painted on a parking space for electric cars inside a car park in Hong Kong. — Reuters
BEIJING: China is considering a further reduction in electric-vehicle subsidies next year as the government pushes automakers to innovate rather than rely on fiscal policy to spur demand for alternative-energy cars, people familiar with the plan said.
The average purchase incentive per electric vehicle may be lowered by more than a third from the 2018 levels, said the people, who asked not to be identified disclosing information that isn’t public. Vehicles may be required to be able to go at least 200km on a single charge to be eligible for incentives, up from 150km currently, said the people. The plan is still under discussion and subject to changes, they said.
A woman standing behind a Baojun E100 electric vehicle in Liuzhou, Guangxi province, China. — Bloomberg
The government is scaling back subsidies to place more emphasis on the need for technological improvements to ensure the industry’s long-term success. As part of new rules that went into effect on Feb 12, China lowered subsidies by varying degrees for EVs with a driving range of less than 300km. At the same time, the incentive for those that have a range of 400km and beyond was raised to 50,000 yuan (around RM30,000).
The National Development and Reform Commission, an auto industry policy maker, didn’t immediately respond to a fax seeking comment.
Subsidies have been key to making electric vehicles and plug-in hybrids more affordable in China, helping the market surpass the US as the world’s biggest in 2015. The central government spent 6.64 billion yuan (RM4bil)last year funding consumers’ purchases of such autos, according to the Ministry of Industry and Information Technology.
On top of what the federal government spends, Chinese cities and provinces separately offer incentives to make electric cars more appealing to buyers.
