China is set to slash subsidies offered for new energy vehicles across the country.
The Finance Ministry has revealed that subsidies will be cut by 30 percent throughout 2022 before being withdrawn altogether at the end of the year. This comes after the ministry confirmed in April 2020 that NEV subsidies would be gradually cut from 2020 to 2022 by 10 percent, 20 percent, and 30 percent respectively. Subsidies for new energy vehicles used for public transport will also be cut by 20 percent this year.
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China’s subsidies for electric and hybrid vehicles have helped to improve sales of alternatively-powered vehicles throughout the country. The government has set a target for NEVs to make up 20 percent of auto sales by 2025.
Among China’s most important companies in the NEV space is Nio. It has informed buyers of the ES8, ES6, and EC6 that if they had paid a deposit on or before December 31, 2021, and are taking delivery before March 31, 2022, they can still receive the benefits at their 2021 rates. The automaker added that it will bear the cost of any shortfall triggered by the 2022 policy.
Reuters reports that the China Association of Automobile Manufacturers estimates that sales of NEVs in China would have grown by 47 percent to 5 million throughout 2021.
