China halves subsidies for pure electric passenger cars

SHANGHAI, Mar 27 (SMM) – China announced its long-awaited plan on Tuesday March 26 to cut subsidies for new energy vehicles (NEVs), to encourage innovation and promote high-quality development of NEVs.

The national subsidy for pure electric passenger cars with a driving range of 400 kilometers and above will be cut by half, to 25,000 yuan per unit, according to a document jointly released by the Ministry of Finance, Ministry of Industry and Information Technology (MIIT), Ministry of Science and Technology, and Development and Reform Commission. 

NEVs with a range below 250 kilometres will not receive any subsidy, compared with the previous threshold of 150 kilometres. 

There is a transition period from March 26 to June 25 for local government subsidies. During the period, NEVs meeting the technical standards for 2019 will receive 60% of local government subsidies in 2018, while electric cars below the technical standards for 2019 will get only 10% of last year’s local subsidies. 

Fuel cell vehicles will be subsidised by 80% in 2018 during the period. 

After the three-month transition, local governments will stop subsidising purchases of NEVs, except for new energy buses and fuel cell vehicles, and use the funds to improve charging facilities and other supporting services.