Chinese Government Fines 5 Automakers For Fraud In Electric Car Sales Reporting

SEP 18 2016 BY ERIC LOVEDAY 11

As an automaker, if you over report plug-in vehicle sales in an attempt to collect government funds from sales of such vehicles, then you’ll likely get caught.  And China isn’t exacting a country where cheating the government seems like a really smart idea.

But that’s exactly what happened recently in China, where five automakers were caught attempting to defraud the system.

According to the Wall Street Journal:

“The Chinese government has fined five auto makers it says defrauded it of a total of 1 billion yuan ($150 million) worth of subsidies aimed at promoting electric vehicles…”

“Four of the bus-making companies abused the subsidy program by padding their reported electric-vehicle sales, the Ministry of Finance said in a statement on its website. The fifth, Gemsea Bus Manufacturing Co. in Suzhou, fabricated its electric-vehicle-manufacturing business entirely and didn’t actually make the alternative-energy vehicles.”

“The companies, which include Higer Bus in Suzhou, Wuzhoulong Motors in Shenzhen, Chery Wanda Bus Manufacturing Co. in Guizhou and Henan Shaolin Bus, were unavailable for comment…”

Those five companies will be required to return all subsidies received, plus will have to pay an additional amount that’s equal to 50% of the subsidy received. In addition, all five automakers have been forever removed from the list of being eligible for subsidies.

It’s believed that other Chinese automakers padded their plug-in vehicle sales figures as well, but the government was only willing to disclose the 5 worse offenders at this point in time.

Source: Wall Street Journal

Categories: China

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11 Comments on "Chinese Government Fines 5 Automakers For Fraud In Electric Car Sales Reporting"

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Roy_H
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Roy_H

Did they really think they could get away with it? They probably claimed advanced sales and will deliver next year. Except of course the paper company Gemsea Bus, I’ll bet he as already absconded with the money and left the country.

Pushmi-Pullyu
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Pushmi-Pullyu

Given the level of corruption among officials in China, it’s entirely possible these companies were used to getting away with this or similar things, by paying a *ahem* gratuity to the right officials.

As others posting about similar cases in China have snarkily observed, perhaps the problem is that the brown envelopes weren’t fat enough.

super390
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super390

I always thought the Chinese used briefcases full of gold bars. I’m just a romantic.

alohart
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alohart

Apparently, if one bribes the correct people, anything is possible. The current Chinese government claims that it is trying to rein in corruption, so maybe these companies got caught as a result of the crack-down.

Nick
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Nick

They are lucky to have only received fines.

ffbj
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ffbj

It’s still early.

ElonJR
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ElonJR

They got banned from EV subsidies forever. That sounds like justice to me. You either use or abuse. Can’t do both

abc123
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abc123

Yeah. I was expecting executions of top level management.

SJC
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SJC

China wants to reduce the number of EV makers, they will issue licenses for legal operations.

ModernMarvelFan
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ModernMarvelFan

“In addition, all five automakers have been forever removed from the list of being eligible for subsidies.”

That is a big consequence.

That will kill off those 5 business pretty much for ever.

But there are so much “short term thinking” in many of the Chinese business that this might not stop the shady practice.

Often with corruptions, the business is about making a quick buck rather than having a long history and legacy.

At least government is cracking down and it should set examples for the rest of them.

HIVLTG
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HIVLTG

The government should force them to sell only EVs!