China may increase EV subsidies due to declining car sales

China could expand its electric car subsidies as it deals with new car sales and a slowdown in the economy as a whole.

The country’s longest-running EV subsidy is set to expire this year, but experts say government departments, including the Ministry of Information and Industrial Technology, are considering continuing the subsidy until 2023.

Details about possible extensions are limited, meaning how generous they will be or which vehicle will be suitable for them is not yet known. The government is expected to reduce the 10 per cent purchase tax on eligible fully-electric and electric vehicles to 5 per cent.

Read more: This electric truck comes from a Chinese company that makes cranes and excavators

China originally planned to phase out its EV subsidy project by the end of 2020, but it was extended due to the COVID-19 epidemic. Reuters It should be noted that since 2009, China has provided 100 billion yuan ($ 14.8 billion) in subsidies to buyers of new energy vehicles.

According to the China Association of Automotive Manufacturers (CAAM), sales of new energy vehicles rose 45 percent year-on-year to 299,000 in April, but growth slowed in March due to the presence of many Chinese cities in Kovid. – Lockdown until April 19. Overall sales across China fell nearly 48 percent last month from April 2021, prompting CAAM to urge the government to consider providing additional support for the industry.

In addition to keeping the existing EV subsidy longer than initially planned, it is understood that China may introduce subsidies that will encourage rural buyers to buy NEVs by paying up to 5,000 yuan ($ 740).

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