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Kiay cuts subsidies to electric vehicle manufacturers

Asia / Engineering

In April 2020, Beijing announced that China would extend its subsidy scheme until the end of 2022 to stimulate production of electric vehicles after Covid-19.

Kiay cuts subsidies to electric vehicle manufacturers

According to the Chinese Ministry of Finance, the country will cut subsidies for new electric cars by 20% in 2021 from a year earlier.

Subsidies for electric vehicles used in the public transport sector, including city buses, commercial passenger cars, taxis, ambulances, logistics vehicles, postal service vehicles, airport shuttle buses and government vehicles, will be reduced by 10% this year.

The technical standards that car manufacturers must meet to apply for subsidies, such as battery specific energy, range and energy consumption, will not change in 2021. An electric vehicle must have a minimum mileage of 300 km to qualify for a subsidy of 16,200-22,500 yuan ($ 2,500- $ 3,500) in 2020. The plug-in hybrid has a minimum cruising range of 50 km with a subsidy of ¥ 8,500.

The PRC government will continue to strengthen its supervision over the safety of electric vehicles. Subsidies will be suspended or canceled if the manufacturer is at fault for an accident due to inadequate safety systems or for not recalling the vehicle after problems were discovered.

The country will also take measures to limit blind investment and unauthorized construction of production facilities for the production of electric vehicles to prevent overcapacity. These measures include tightly controlling production growth, optimizing inventory management, enforcing tolerance standards for new manufacturing projects and expansion plans, and encouraging mergers and reorganizations of larger companies.

The country sold 1.109 million electric vehicles in the first 11 months of last year, up 3.9% from the same period in 2019, according to the China Automobile Manufacturers Association.

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