2/17/2014

China Stretches Out EV Subsidy Program

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China is slowing down a planned reduction in subsidies for electric vehicles to help hike demand and control severe air pollution problems in several of its largest cities, Bloomberg News reports.

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China is slowing down a planned reduction in subsidies for electric vehicles to help hike demand and control severe air pollution problems in several of its largest cities, Bloomberg News reports.

The program currently provides payments as high as 60,000 yuan ($9,900) for an electric car and as much as 500,000 yuan ($82,500) for an electric bus. An analyst tells Bloomberg the main beneficiaries have been buyers of electric powered buses, trash trucks and fleet cars.

Under the new policy, government subsidies for EVs will be reduced by 5% instead of 10% this year and 10% instead of 20% in 2015, according to a joint announcement by the country's finance, technology, industry and development ministries.

China has said it hopes to put 5 million EVs on its roads by 2020. But volumes are significantly behind schedule, Bloomberg says. High vehicle costs and a lack of charging infrastructure continues to hurt demand. The country's finance ministry said in January that China will expand its support of alternative-energy vehicle to several new cities.