China to cut subsidy for new energy cars
China is extending subsidies on new energy vehicles to 2022, with the stimuli for this year a mild drop of 10 percent from 2019, which is expected to alleviate the COVID-19 pandemic’s impact on car sales and fuel the budding sector’s development.
The authorities originally planned to end this year the subsidies that have been in place since 2009, but the State Council, China’s cabinet, decided in March to extend them for another two years.
Under the new plan, China is extending subsidies for another two years, with them cut by 10 percent, 20 percent and 30 percent year-on-year until 2023.
The ministry said authorities will raise the requirements in terms of the driving range and power efficiency of cars that qualify for the subsidies which were designed to encourage the capable instead of protecting the incapable.
China is also setting a cap of around 2 million on the number of vehicles eligible for subsidies, which will be in a first-come-first-served manner.
“This accounts for some 8 percent of car sales in China,” said the ministry. “Setting a cap is a practice in other countries as well, like the UK and Germany.”