In the new year, China will reduce subsidies for the purchase of electric vehicles and hybrids

In the new year, China will reduce subsidies for the purchase of electric vehicles and hybrids


As the production of “new energy” vehicles matures in China, the government needs less and less assistance to companies. Therefore, in the new year, the base subsidy for the purchase of electric vehicles and hybrids will be reduced by 20% for personal vehicles and 10% for commercial vehicles. Local authorities are left with the right to subsidize purchases from their own budget, if required by regional development programs. A number of other interesting laws have also been passed.

The 10 percent cut in subsidies covers the purchase of city buses, mainline buses, taxis, ambulances, freight transport, postal, express delivery, and civil aviation and airport services. Let us add that the state in the form of a subsidy compensates manufacturers for the discount on electric vehicles that they provide to the buyer. In other words, the state pays extra for the pleasure of using electric cars or hybrids.

New test methods and requirements will also be presented that determine eligibility for subsidies. In 2021, new methods will be introduced, but until they are approved, it is allowed to use the old ones.

The new regulation encourages auto companies to actively investigate defects and recalls. If companies know that their products have quality problems and do not take the initiative to recall them, which leads to serious accidents, or if the situation reaches the point that the recall comes in the form of an order from the regulator, then this will be followed by sanctions, for example, suspension or elimination of subsidies.

Finally, in the new year, government and new energy transport regulators will encourage mergers and reorganizations to create mature and competitive manufacturing. In general – to prevent chaos, fraud and dispersal of investments in the industry.

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