China Energy Outlook 2020 - Flipbook - Page 95
Subsidies for New Energy Vehicles
China has seen a rapid growth in sales of New Energy Vehicles (NEVs) as a result of its
aggressive pilot subsidy programs, some of which have recently been substantially reduced
with potential full phase-out after 2020.
China’s Ministry of Science and Technology (MOST) and the Ministry of Finance (MOF) started
the Ten Cities, Thousand Vehicles program in January 2009 to provide national and local
subsidies for qualifying pilot cities to purchase New Energy Vehicles (NEVs), which include
battery and plug-in electric and fuel cell vehicles for their municipal fleets. The pilot subsidy
program was renewed, refined, and expanded in 2013 to include 39 pilot cities with additional
deployment, procurement and local incentive requirements for pilots (Gong et al., 2013; MIIT,
2013). The subsidy amounts were increased in 2014 and 2015 due to slow NEV sales, but
gradually reduced since 2016 in response to rapid growth in NEV sales (MOF, 2016), as shown
in Table 2-16.
Table 2-16. New Energy Vehicle Sales and Central Government Subsidies
Sales
Central Gov't Subsidy
('000)
11
17
84
379
500
770
1,256
2012
2013
2014
2015
2016
2017
2018
2019
2020
Notes: *Partial, **Estimated
Sources: CCID, 2019; Qiu, 2019.
(billion RMB)
36.4
50.3
9.084*
100**
NEV development in China has also been supported by the adoption of a series of
complementary policies from late 2016 through 2019 as shown in Figure 2-4. In 2017, the
government raised the technical thresholds (e.g. driving range) for NEVs and NEV
manufacturers, set caps on central and local NEV subsidies, and improved the payment method
for subsidy funds (MIIT, 2017c; MOF, 2016). In 2018, policies were also introduced to exempt
NEVs from vehicle purchase taxes, to establish a complete battery recycling system, and to
support the planning and development of NEV charging infrastructure facilities.
Total Central Government spending on subsidies are estimated to have reached nearly 100
billion RMB (about $US14.7 billion), with a further 100 billion RMB expected for 2018, 2019 and
2020, not including unknown expenditures from local matching programs. In 2019, subsidies
were cut substantially by 47-60% depending on driving range for NEV cars sold in 2019; buses
and fuel-cell vehicles were exempted from the cuts (Ren, 2019). In 2019 it was announced that
local subsidies will be phased out after the transition period beginning on March 26, 2019
(MOF, 2019c).
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