New energy vehicles: large subsidies

Recently, the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, and the National Development and Reform Commission issued the "Notice on Continuing the Promotion and Application of New Energy Vehicles" (hereinafter referred to as the "Notice"), clarifying the 2013-2015 new energy vehicle subsidy policy. The "Notice" proposes that in the three-year period, the focus will be on areas with heavier particulate matter such as the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta. Select mega-citizens or urban agglomerations with higher enthusiasm to continue to promote the use of new energy vehicles. It also focuses on increasing the promotion of new energy vehicles in government agencies, public institutions, and public transportation.

Regarding subsidies, the "Notice" pointed out that the new energy vehicle models that are included in the scope of the central government subsidies this time should be pure electric vehicles, plug-in hybrid vehicles, and fuel cell vehicles that meet the requirements. The subsidy standard is based on the basis price difference between new energy vehicles and similar traditional automobiles, and considers the scale effect, technological progress and other factors to degrade each year. Contrary to this, the central government allocates subsidy funds to new energy automobile production companies, implements quarterly advances, and annual liquidation, and consumers pay after deducting subsidies based on sales prices. In addition, the central government will also arrange funds to give comprehensive awards to model cities. The award funds will be mainly used for the construction of charging facilities.

The biggest highlight of this new energy vehicle subsidy policy is the change of subsidies and standards for new energy vehicles. In accordance with the new policy, a new round of subsidies is directly replenished to automobile manufacturers. At the same time, pure electric passenger cars adopt a graded subsidy, adding a subsidy standard for medium-sized pure electric buses. This policy will help accelerate the promotion of new energy vehicles and will benefit the entire industry. The central government's uniform distribution will achieve the unity of the national subsidy standards, and it will be able to mobilize the production enthusiasm of new energy car enterprises to a greater extent so that they can directly benefit. Chinese companies still need to learn more from abroad in terms of overall innovation capabilities.

Most manufacturers are also optimistic. Some manufacturers have indicated that this new energy subsidy policy is more complete. Subsidies for new energy vehicles will be distributed directly from the central government to manufacturers, which will increase transparency in the market competition. In addition, in this policy, pure electric vehicles are still the focus, which is conducive to guiding enterprises to increase R&D and investment in pure electric vehicles, which will help car companies to launch more new energy vehicles.

The new subsidy policy for new energy vehicles is unprecedented, and China is expected to become the largest market for new energy vehicles in the world. New energy vehicles are facing some pressure in many parts of the world, but with the follow-up of policies, the industry will continue to develop, and China will have a large consumer group in the future.