Chinese government plans Yuan 31.4bil subsidy for NEV in 2020
The Ministry of Finance of China announced the results of the subsidy distribution for reduction of emissions to local governments in 2020. It revealed that the amount of subsidy for promotion of new energy vehicles (NEV) was Yuan 16 bil in 2017, while that for energy efficient and new energy bus operations was Yuan 15.3 bil in 2018. The total amount of subsidy for the two years added up to Yuan 31.3bil. The Chinese government was said to be setting aside Yuan 3.14 bil of subsidies for 2020.
The subsidy was for 37 regions in the country. The largest amount was Yuan 5.46 bil for Henan Province. Car maker Yutong is located in the province, which accounts for the largest market share new energy buses in China. This is followed by Yuan 2.9 bil for Hunan province and Yuan 2.8 bil for Shandong province.
The Chinese government started the promotion of NEV in 2009, and started the subsidy policy from 2010. Due to the policy, a lot of companies made inroads into the NEV industry, so that China has become the largest market in the world for NEV.
In the meantime, the amount of subsidy for NEV has been declining year by year, and is expected to be terminated at the end of next year. After the termination of the subsidy, the government would continue a so-called double point policy and intends to promote sales of NEV.
According to data by the China Association of Automobile Manufacturers, the production of NEV in the country from January to October in 2019 was 983,000 units, up 11.7% from the same period last year. The data also indicated that the number of new energy buses has reached 340,000 units in 2018, accounting for 50% of the total number of buses operating in the country.
Note: "Double point policy"- The Chinese government imposes regulations on the fuel efficiency of vehicles to companies which produce and sell them in country. At the same time, the companies are obliged to produce and sell a certain proportion of NEV. Through the policy, the government is aiming to promote sales, research and development of NEV. The policy started in 2018 and was partly revised in 2019.