Subsidy Program for Electric Bikes to Start in Rural Areas

SHANGHAI, May 6 (SMM) -- Shaanxi province will release the list of e-bike producers eligible for the Central Government's e-bike subsidy program in rural areas soon. This will be the first region of ten provinces having been approved to participate in the e-bike subsidy program that determines the type and brand of e-bikes qualified for the subsidy program.

According to sources, Shaanxi province held a bid opening conference on April 30 for e-bikes, a new one on the list of products for subsidy program in rural areas, with 62 enterprises submitting the bid. Many senior officials of e-bike producers said the proportion of fiscal subsidy for e-bikes is 13% in accordance with the implementation plan on newly-subsidized home appliances in the countryside, carried out by the Ministry of Finance and Ministry of Commerce. Based on the plan, the maximum subsidy for e-bikes in rural areas will be RMB 260 per vehicle, with 80% of subsidies from central budget, and the rest of 20% from provincial budget. The period of e-bike subsidy program in rural areas will be the same as that for other subsidized home appliances in the countryside, and will be expired in February 1st, 2013, and each household in rural areas are only allowed to buy two vehicles at most. 

Hu Gang, Deputy General Manager of Xinri E-Vehicle Company Limited, one of leading e-bike producers in China said the soon-to-be-released subsidy program in Shaanxi province will serve as a precedent for other provinces that have not announced the relevant policy, including Hebei, Jiangsu, Shandong, Henan, Hubei and other provinces. Given the population of e-bikes in China has reached to 120 million vehicles, the new subsidy program for e-bike in rural areas is expected to increase new demand worth RMB 1 billion based on existing subsidy level. Many other producers took a rosier outlook, believing major markets for e-bikes are mainly in second and third-tier cities, as well as the vast countryside. Following rapid construction of new rural areas, more provinces and cities will be likely added to the list of regions eligible for e-bike subsidy program. By then, newly-increased demand for e-bikes is expected to exceed RMB 2 billion.

SMM believes other provinces qualified for implementing e-bike subsidy program will speed up their work schedule for the incentive program for e-bikes in rural areas, after Shaanxi province releases the detail policy for the e-bike subsidy program. Consumption for e-bikes will be boosted as a result. However, demand for lead-acid battery used in e-bikes will not improve significantly in the short term. 

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