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China will not cut EV subsidies this year

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China will not make significant cuts to subsidies for new energy vehicles (NEVs) this year, Minister of Industry and Information Technology Miao Wei told a recent gathering of auto industry execs. The government-backed Beijing News confirmed that “this year’s NEV subsidy policy will remain relatively stable and there will not be significant cuts.”

China implemented a generous five-year program of NEV subsidies in 2016, but reduced them in 2019, and announced plans to phase them out completely after 2020, citing concerns that some firms have become too dependent on the funds.

This year’s subsidy cut took a bite out of monthly NEV sales, which dropped for the first time in two years. Miao said 1.2 million NEVs were sold in 2019, down from 1.3 million in 2018.

The announcement was music to the ears of automakers. He Xiaopeng, CEO of EV startup XPeng Motors, told Reuters Miao’s speech was “the best news,” and added that policy stability was crucial to the industry.

Source: Reuters

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