China Cuts Subsidies For New Energy Vehicles To Zero Percent By End Of 2022

Electric cars are new energy vehicles that will be removed from subsidies. (photo: unpslash)

JAKARTA - China will cut subsidies on new energy vehicles, such as electric cars, by 30% by 2022. They will also remove these subsidies by the end of the year. This statement appeared from China's Ministry of Finance on its website on Friday, December 31.

China's finance ministry had said in April 2020 that new energy vehicle subsidies would be cut from 2020 to 2022 by 10%, 20% and 30%, respectively.

For new energy vehicles used by public transport, the subsidy will be cut by 10% in 2021 and by 20% in 2022.

China, by far the world's largest auto market, has set a target for new energy vehicles, including plug-in hybrids and hydrogen fuel cell vehicles, to generate 20% of car sales by 2025.

Global automakers such as Volkswagen AG, General Motors Co, Toyota Motor Corp and Tesla Inc are currently increasing production of electric vehicles in China.

Car manufacturer NIO, meanwhile, said last Friday that buyers of NIO vehicles of the ES8, ES6 and EC6 models who have paid a deposit on or before December 31, 2021, and received delivery of their purchase before March 31, 2022, can still enjoy subsidies under the 2021 plan. Any shortfalls under the 2022 policy will be covered by the Shanghai-based company, he said.

The ministry also said China would tighten oversight of new energy vehicle safety issues to prevent accidents.

The China Automobile Manufacturers Association industry body previously estimated that in December that new energy vehicle sales in China would grow by 47% to 5 million in 2021.