China To Fully Phase Out Green Car Subsidies By 2022

2 years ago by Mark Kane 9

DENZA EV

DENZA EV

China

China

Sales of all-electric and plug-in hybrid vehicles in China surged in 2015 after various incentives were applied by the government.

Incentives will be available for several years before they fully disappear in 2022 after gradual decreases, according to China’s Finance Minister Lou Jiwei.

The plan is to cut subsidies by 20%, then by 40% and finally to remove them entirely.

“Lou reiterated plans to cut subsidies by 20 percent over the next two years and 40 percent by 2019-2020, eliminating them altogether after 2021 so that the industry does not grow dependent on them.”

By that time, the Chinese plug-in market probably will be measured in millions annually, so it would be difficult to subsidize it anyways at that sizing, and plug-in technology needs to become competitive in consumers’ eyes without incentives.

The next decade will probably bring a significant decrease in incentives in many other countries too.

China production and sales of New Energy Vehicles – December 2015

China production and sales of New Energy Vehicles – December 2015

Source: Reuters

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9 responses to "China To Fully Phase Out Green Car Subsidies By 2022"

  1. Pushmi-Pullyu says:

    “…plans to cut subsidies by 20 percent over the next two years…”

    So, I guess the leaders of China aren’t nearly as committed to reducing burning fossil fuel as we thought.

    “By that time, the Chinese plug-in market probably will be measured in millions annually, so it would be difficult to subsidize it anyways at that sizing…”

    Why difficult? It’s a centrally controlled economy. China’s leaders can throw as much money as they want at the problem, and arguably the alternative — continued massive air pollution — would be far worse in the long run. Are China’s current financial straits really so dire that they can’t afford this investment in the future?

    “…and plug-in technology needs to become competitive in consumers’ eyes without incentives.”

    Certainly, but that ain’t gonna happen in only two years. Ten years, maybe. But that can happen only if China’s culture changes so that it becomes easy for car owners to get EV slow chargers installed where they park their cars at night or during the workday.

    1. Ambulator says:

      It will be about the right time to remove the incentives. If they are smart it will be time to add some disincentives for internal combustion engines, though.

  2. jelloslug says:

    They can still control the mix of EV vs ICE by limiting the registrations of specific types of cars in urban areas.

    1. Pushmi-Pullyu says:

      Good point. With China’s highly restrictive “lottery” on license plates limiting the number of cars that can be registered every year, they certainly can use that to limit gasmobiles far more than plug-in EVs. And for the government, it would be a more-or-less cost-free way to promote EVs over gasmobiles.

      Now, let’s see if the Chinese government actually does that.

  3. Jychevyvolt says:

    China’s ev program is filled with corruption by local government. I’m surprised it lasted this long.

  4. By the time, most metropol areas will have banned entry for mobile exhaust systems, so no need to pay extra money for not buying them.

  5. Nix says:

    If any one of the 10X battery improvements we’ve heard about comes true by 2022, the timing should be just about right.

    Even if we stick with our current 14% annual average improvement in cost per kWh with commodity cells, battery prices will have dropped by more than half by then. Other components should have dropped in price by then too.

    If 2022 is premature, they certainly can reconsider.