Chinese government fines five finagling firms for fraudulent EV subsidies

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China has been heavily promoting EVs and other “new energy vehicles,” in order to reduce its choking air pollution, cut dependence on oil imports and give it a leg up in the global auto industry.

According to UBS Securities, Chinese governments at all levels invested around 90 billion yuan ($13 billion) in plug-in vehicles in 2015, including direct cash subsidies to EV-makers. Unsurprisingly, the fire hose of money has led to some funny business.

The Wall Street Journal reports that five bus manufacturers have been fined for defrauding the Chinese government of a total of 1 billion yuan ($150 million) in subsidies aimed at promoting EVs.

Four of the companies, Higer Bus, Wuzhoulong Motors, Chery Wanda Bus Manufacturing and Henan Shaolin Bus, abused the subsidy program by padding their reported EV sales, according to the Ministry of Finance.

The fifth, Gemsea Bus Manufacturing of Suzhou, invented a fictitious EV manufacturing business, and never actually built a single electric vehicle.

Each of the companies must pay back the spurious subsidies, in addition to a fine equal to 50% of the subsidy amounts.

The ministry said it investigated 90 automakers, following media reports of fraud. It didn’t say how many cases of fraud it found.

According to Chinese government data, sales of electric and hybrid cars and buses quadrupled in 2015 to 331,000 vehicles. As the WSJ points out, it’s unclear how many of those reported sales may be false.

 

Source: Wall Street Journal