The ball leader. Last year, China produced and sold 770,000 electric vehicles, a 53% increase from 2016, almost four times the US sales. Since electric vehicles are still at a cost disadvantage compared to conventional internal combustion engines, the government's subsidy policy has made it possible for electric vehicles to grow rapidly. To encourage industry growth, China has provided manufacturing incentives for electric vehicle companies and subsidized consumers who buy electric vehicles.
For example, a large number of incentives for electric bus production have increased the sales of electric buses in China from more than 1,000 in 2011 to 132,000 in 2016. Due to the reduction in the electric bus subsidy program, China’s electric bus sales declined slightly last year, but 99% of the 352,000 electric buses on the global roads are on Chinese streets and highways. At present, more than 30 companies in China are producing electric buses. Illustration: On February 17, 2018, traffic congestion occurred in Beijing.
While China hopes to achieve a cleaner environment by popularizing electric vehicles, paying subsidies is a costly way to achieve the goals. Although battery costs have declined in recent years, they are still much higher than the operating costs of fuel vehicles. Therefore, in order to encourage individuals to purchase electric vehicles, the government must subsidize consumers, or car manufacturers must sell electric cars at the same price as similar fuel vehicles.
According to statistics, on average, each electric vehicle is subsidized by 10,000 US dollars, which means that in 2017, the central and local governments spent 7.7 billion dollars on electric vehicle subsidies alone. However, it is estimated that China's electric vehicles will reach 2 million in 2020 and 7 million in 2025. According to the current subsidy program, the total subsidy will increase to about 20 billion US dollars in 2020 and 70 billion US dollars in 2025.
At the same time, China's auto market has become one of the most lucrative markets for local and international assemblers worldwide. In September last year, the Ministry of Industry and Information Technology, which oversees the automotive industry, announced a rule change that effectively transferred subsidies for the development of China's electric vehicle industry from the government to auto companies.
<img alt="Foreign media: How will China's subsidized electric vehicle tens of billions of policy adjustments last year" src="http://cms-bucket.nosdn.127.net/catchpic/5/5b/5bf69ff7b6d7c608cc232ce0de8ce6bf. Jpg?imageView&thumbnail=550x0" ,MicrosoftYahei, sans-serif; text-align: start;" /> icon: On Friday, September 15, 2017, a charging station at General Motors' Shanghai headquarters parked a General Motors Chevrolet Volt electric car .
Under the new rules, which will come into force in 2019, the double-point policy for subsidies is designed to improve the fuel efficiency of traditional fuel vehicles and promote the deployment of electric vehicles. The new regulations require that by 2020, automakers that sell 30,000 or more cars a year in China must produce 5.6-liter cars that consume 100 kilometers of fuel; by 2025, they produce cars that consume 4.3-liters of oil per 100 kilometers. Vehicle-related manufacturers that do not meet the quota will receive negative credits. If they are allowed to accumulate, they must offset negative credits by purchasing positive credits from other companies or reducing the production of fuel vehicles.
In 2019, local and foreign automakers will be required to receive 10% of the total amount of cars they produce and import into China, which will increase to 12% by 2020. According to Colin McLachcher, an analyst at Bloomberg New Energy Finance in London. By 2020, 12% will be converted into 4% to 5% of the company's actual car sales.
While announcing new regulations for automakers, China announced its intention to reduce and eventually eliminate consumer subsidies for electric vehicles. To encourageDevelopmentElectric vehicles with longer distances and greater battery pack density, China's new policy on electric vehicle subsidies came into full force on June 12.
As part of the new program, subsidies based on cruising range will be further adjusted based on battery pack density. In addition, it is unclear whether the subsidies provided by local governments will change.