China to impose deeper cuts of EV, plug-in hybrid subsidies
China said it will cut subsidies on electric vehicles and plug-in hybrids more than it previously considered, even as sales lag behind an official target.
The finance ministry will reduce subsidies on the vehicles by 40 percent in 2019 to 2020 from the 2016 level, according to a statement posted on the ministry's website Wednesday. The amount is double the size of the cut the ministry said it was considering in December.
Most automakers in China have been introducing EVs and plug-in hybrids, spurred by financial incentives and exemptions from registration restrictions. The government has gradually lowered subsidies to encourage automakers to make more competitively priced products.
"This will force carmakers to speed up product development and make their electric cars and hybrids cheap enough to lure consumers even without government's financial help," said Song Yang, an analyst with Barclays.
In December, the government published a proposal to cut EV and plug-in hybrid subsidies 10 percent in 2017 from the 2016 level. In 2019, it would follow up with another 10 percent reduction.
Most automakers in China have been introducing EVs and plug-in hybrids, spurred by financial incentives and exemptions from registration restrictions. The government has gradually lowered subsidies to encourage automakers to make more competitively priced products.
"This will force carmakers to speed up product development and make their electric cars and hybrids cheap enough to lure consumers even without government's financial help," said Song Yang, an analyst with Barclays.
In December, the government published a proposal to cut EV and plug-in hybrid subsidies 10 percent in 2017 from the 2016 level. In 2019, it would follow up with another 10 percent reduction.
