China has renewed subsidies for the purchases of new energy vehicles (EVs and PHEVs) for another three years. The country’s Finance Ministry announced this week that it will offer up to 60,000 yuan ($9,800) for the purchase of an EV, up to 35,000 yuan for a PHEV, and up to 500,000 yuan for an electric bus. The exact amount offered depends on a vehicle’s range.
The program seeks to “speed development of the new energy automobile industry, reduce emissions and help control pollution,” the ministry said.
The amounts of the subsidies, which take effect immediately, are the same as those of the previous round, which expired at the end of last year, but will be reduced by 10% next year, and by 20% in 2015.
China’s official goal is to have 500,000 hybrid and electric cars on its roads by 2015 and five million by 2020, but there were only about 27,800 new energy vehicles at the end of 2012, 80% of which were buses, according to the official Xinhua news agency. Auto analysts don’t seem to think the new policy will move the needle much.
“The new policy is basically the same as the previous one and doesn’t really address the underlying problems,” Shanghai auto analyst Han Weiqi told Bloomberg. “Unless there are follow-up measures to step up support for hybrids, today’s policy is not expected to spur the EV market.”
“Car makers will have to make their energy-efficient products more competitive to attract buyers,” Yale Zhang of Automotive Foresight told the WSJ.
Auto makers will be introducing a wide range of new energy vehicles in China over the next few years. Daimler and BYD plan to start producing the Denza EV this year, and put it on sale in 2014. Toyota unveiled its Yundon-Showanchin II hybrid, which was developed specially for China, in April.
Sources: Reuters, Xinhua, Bloomberg, Forbes, Wall Street Journal