China’s new energy subsidies may be extended beyond 2020

People familiar with the matter said China may extend subsidies for new energy cars beyond this year to revive the market, Bloomberg reported.

 

 

 

This can’t be introduced by the insider who leaked the name. Since 2019, when the annual sales volume of new energy cars in China has declined for the first time, the leadership has been commenting on whether to continue to extend the subsidy policy. The report said the Ministry of industry and information technology did not respond to faxes it asked for comment.

 

 

 

Miao Wei, Minister of Ministry of industry and information technology, told more than a thousand audience at the 2020 annual forum of the 100 people’s Congress in mid January this year that there would be no sharp decline in (subsidies) on July 1 this year. There was immediate applause at the scene. But in the next few hours, different media, shorthand of the organizers of the conference and other different ways of expressing this constantly changed.

 

 

 

Time flies. It has been 10 years since the new energy subsidy policy was issued in a flash. During this period, the maximum subsidy for individuals to buy electric cars has reached 120000 yuan, which really helps China develop into the largest market of electric cars.

 

 

 

However, when the subsidy declined, in 2019, the production and sales of new energy cars will be 1242000 and 1206000, down 2.3% and 4% year on year. Among them, the production of pure electric cars was completed with 1.02 million vehicles, a year-on-year increase of 3.4%; the sales was completed with 972000 vehicles, a year-on-year decrease of 1.2%. Affected by the new crown epidemic, the production and sales of new energy cars in January this year showed a precipice decline.

 

 

 

According to the Bloomberg person familiar with the matter, it is unclear when the subsidy will decline further if it is extended beyond this year. It is understood that the national development and Reform Commission has now submitted the issue to the Ministry of finance, but the Ministry of finance has not yet replied.

 

 

 

However, the review is still in the initial stage, so it can’t ensure that the subsidy will be extended. From the current situation, it is still more likely that the subsidy will be gradually cancelled at the end of 2020.