Original link: http://www.cnenergy.org/jp_482/qc/201612/t20161222_410382.html
The latest subsidy policy on plug-in electric vehicles (PEVs) attracting extensive attention has been protracted to be released. Ministry of Industry and Information Technology of the People's Republic of China posted documents on its website on December 21 adjusting subsidies due to subsidy-related fraud and outlining caps on subsidies and increasing technical specifications required to receive funding on PEVs.
A reporter of Information Times had received a document spread from automakers indicating the revised subsidy scheme. In addition, the reporter was told by automakers, “The government will roll back subsidies on PEVs in 2017 for sure even though the official policy paper has not been issued.”
The reporter learned from the market that the local government subsidy policy has been vacant for a year in Guangzhou, causing dealers offering subsidies based on the policy in 2015. The new policy of the government rolling back subsidies indicated that the expenditure of a consumer on PEVs would rise next year.
Local government subsidies might be reduced by half
Affected by subsidy cheating scandals, PEV subsidy requirements and market access (such as vehicle energy consumption, driving range, battery safety and enterprise credit) would be tightened in 2017 based on the original subsidy scheme from 2016 to 2020. Meanwhile, PEV subsidies would be reduced and for passenger cars in particular.
Compared with the old version, the new scheme set requirements on energy density of the battery system and cut subsidies by 20% to the largest degree. To put it simply, according to division standards of the energy density of the battery and driving range, a PEV should have a battery with energy density not less than 90wh/kg; the base subsidy should be RMB 20,000 for a PEV with the energy density of the battery between 90wh/kg to 120wh/kg and driving range between 100 km to 150 km; 1.2 times subsidies and 2.2 times subsidies should be given to PEVs with the driving range between 150 km to 250 km and over 250 km respectively; the ceiling subsidy should be RMB 48,400.
The current subsidy scheme awarded subsidies between RMB 25,000 to RMB 55,000 based on the driving range only for pure electric passenger vehicles while the scheme in 2017 would reduce the subsidies by 12% to 20%.
The huge reduction of the national government subsidies indicated rolling down of local government subsidies accordingly. “Local government subsidies shall be capped at 50% of subsidies awarded by the national government” under the new policy.
As both subsidies would be reduced under the new policy, the subsidies next year would be only half of those this year.
Hot PEVs sold out
Unlike “subsidy reduction” in other cities, Guangzhou has maintained the most generous policy all over the country, keeping the same subsidy ratio with the national government. Take GA5REV of Trumpchi under GAC Group as an example, the PEV has been entitled to both RMB 31,500 subsidy from the national government and RMB 35,000 subsidy from the Guangzhou government. Furthermore, the highest subsidy of a PEV was RMB 120,000 in Guangzhou.
The subsidy reduction on PEVs, which indicated more expenditure from consumers, might have a significant influence on the PEV market in 2017. Mr. Cao, Manager of U-EV Workshop, said, “The subsidies will be reduced and many vehicles are sold out. It is the last week to buy a car and register it in 2016.”
The reporter learned that as it was near the end of 2016, this week has been the last opportunity for a consumer to enjoy the subsidy policy in 2016 together with procedures to buy a car and reserve for registration. The reporter visited the market and found that few options were left for those rushing for a car. “We have sold out,” said an integrated dealer of a PEV.
BAIC BJEV EV160 with low specifications has been sold out long ago and high-end ones were sold rapidly. Hot PEVs such as EU260, Geely Emgrand series, JAC iEV6 and BYD e6 have been in short supply at the moment.
Some automakers claiming difficulty in selling PEVs in the future
A head of marketing in EV Department of an automobile brand said: “The subsidies are bound to be reduced.” “It is in the middle of December now. The government ought to give enough time for automakers even if it plans to adjust the subsidy policy and release the new one instantly. The automakers are helpless in such a short notice,” said Li Guangtao, Vice Chairman of Venucia BU, Dongfeng-Nissan.
A head of PEV marketing of an automobile brand expressed: “It will be more difficult to sell PEVs from next year since local governments do not want to promote PEVs in the first place as all subsidies come from local finances. They are happy at the new policy. However, automakers, dealers and customers suffer a lot from the policy change.”
Head of JAC PEV said: “Rumor has it that subsidies from the national government and local government would be reduced by 20% respectively under the new policy. It was said in November that local government subsidies should be capped at 50% of subsidies awarded by the national government. It is frustrating. Does the government change the policy to regulate the market...?”
Cao Jun, Vice General Manager in South China Region of BAIC BJEV, said: “it has been reported frequently that the subsidy policy might be adjusted recently without any proof. However, many small enterprises would be eliminated if requirements on PEVs tightened.”
