The BYD 12-meter eBus

The BYD 12-meter eBus

Several months ago, news broke of a massive subsidy scandal in China. The gist of the scandal is that some 25 automakers reported plug-in vehicle sales higher than actual amounts in order to secure additional government money from the subsidy program. China reacted swiftly by banning some automaker from producing vehicles and fining others.

BAIC E150EV

BAIC E150EV

Now, China is attempting to fix the somewhat broken system.

Effective on January 1, 2017, subsidies rates were reduced and additional requirements were put in place.

As Reuters reports on the highlights of the changes:

  • Reduces subsidy rates from Jan. 1
  • Bus makers targeted after subsidy scandal
  • Halves maximum award for buses to $43,000
  • Gives incentives for fast-charging vehicles

The biggest offenders in the scandal were bus makers, so China in particular is cracking down there by including "a new formula for calculating central government subsidies and subsidy caps for electric and plug-in hybrid coach buses, with a maximum subsidy of 300,000 yuan ($43,000) per vehicle, roughly half of the previously listed highest subsidy of 600,000 yuan," reports Reuters.

China Zhongwang and Brilliance Bus Join Hands to Successfully Develop All-Aluminium New Energy Public Buses

China Zhongwang and Brilliance Bus Join Hands to Successfully Develop All-Aluminium New Energy Public Buses

Local government subsidies will be capped too at 50% of the award amount put forth by the central government of Chinba.

Some additional notes of interest (per Reuters)

  • The latest policy introduces a new system for calculating coach bus subsidies based on the energy density, charging speed and, for plug-in hybrids, fuel efficiency.
  • Unlike the previous policy, fast-charging coach buses will receive roughly two-thirds more in subsidies than those that charge at normal speeds.
  • For passenger cars, the policy delivered on earlier promises to roll back subsidies for electric and plug-in hybrids starting with a 20 percent reduction in 2017.
Sales of plug-in have never been higher in China, but these changes may negatively impact sales. However, China has other ways of promoting the purchase of electric vehicles, so the impact of reduced subsidies will likely be negligible.

Source: Reuters