The Chinese automotive market is experiencing huge changes - mainly because of the significant decrease of general car sales, and secondly because of the decrease of subsidies on New Energy Vehicles (currently plug-ins).
The government announced on March 26 decrease of subsidies for electric cars by 67%. The minimum required electric range increased to 250 km (155 miles), while cars with 400 km (249 miles) of range (NEDC) will get 25,000 yuan ($3,700), half of the previous amount.
After 2020, subsidies will be completely phased out, which could have a tremendous impact on profits for plug-in car manufacturers.
Interestingly, China Daily Mail reports that China is now exploring hydrogen fuel cell cars, gearing up to support R&D and rollout.
We remain skeptical because the target of the cumulative number of FCVs is still small compared to current plug-in car sales:
- 5,000 in 2020
- 50,000 in 2025
- 1 million in 2030
The question is whether it's wise to switch to another technology, especially when carmakers are already investing in plug-ins and dealing with a decrease in conventional sales, which makes business pretty difficult.
Source: China Daily Mail