SHANGHAI, Apr 26 (SMM) – China's credit system that rewards longer-range models will continue to boost the development of new energy vehicles (NEVs) now that the government is cutting subsidies. NEV production is likely to reach 6.96 million units by 2025, with passenger vehicles accounting for most of the growth, SMM expects.
By 2025, pure electric passenger vehicles are expected to contribute to about 30% of the yearly increase in NEV output. Consumers' favour towards plug-in hybrid vehicles will keep the output growth around 15% after the subsidy cuts, compared with a growth rate above 35% before the cuts.
A saturated market is likely to extend the decline in production of new energy buses in the long term, SMM estimates.
While current demand for new energy special vehicles remains tepid, advantage from costs and wide applications of the models will emerge after subsidies are phased out by 2020. This is likely to bolster output growth of the models above 40% by 2025, SMM expects.
At the end of January, an official from the Ministry of Industry and Information Technology's said production and sales of new energy vehicles (NEVs) across China are likely to exceed 1.5 million units in 2019.