China Policy on EVs Manufacturers 2019

It has been noticed that EVs subsidies of 2019 will drop 50% from China Government side, and the local will cancel all subsidies. A recent promotional message from BAIC New Energy shows that national subsidies for EVs will be cut by 50 percent in 2019, while local subsidies will be completely eliminated.

On January 12, 2019, the Ministry of Industry and Information Technology Minister MiaoWei in “China EVs Forum 2019” presents report in terms of domestic EVs subsidies expressed as “the General Principle is to ensure all subsidies are withdrawn in 2021, and the EVs Industry will not occur large fluctuations, and prevent ups and downs of EVs Industry while release the pressure.”

Last week, Dong Yang, Executive Vice President of  the China Automobile Industry Association, gave a response about the details of the EVs subsidies in an interview to Chinese media. He said subsidies for EVs will soon be released, and local subsidies will be significantly adjusted. “Local subsidies will focus on electricity cost instead of EVs.” he said.

The different comments from parties clearly forecast the subsidy policy is about to taking place. It is the first year to implement new EVs Subsidy Policy in 2019. It is certain that the subsidies will continue to decline, but the timing of the policy implementation and the subsidy amount have not yet been determined. It was reported previously that the subsidy for EVs will decline by 50% in 2019. In addition, there are rumors that the subsidies will decline by 50% in 2019 and 30% in the first three months of transition period. But the latest version circulating at the moment is that there will be no transition period of this policy and it will be implemented immediately. The amount of subsidies for single vehicle will drop dramatically. It will have seriously impact on China electric car charging unit manufacturers such as NIO， BAIC., etc.

It is worth noting that the Ministry of Industry and Information Technology recently published the catalogue of the first batch of EVs subsidy models in 2019. A total of 106 new energy models from 49 enterprises entered into the catalogue, including 98 pure electric products. The biggest highlight of subsidized models is the 500-kilometer range EVs. It is predicted that China’s power battery energy density will reach more than 200 Wh per Kilogram in 2020. In other words, the range of electric car charging solutions will continue to improve. China produced 92,000 EVs in January 2019, according to a report released by the national passenger car market information Joint Committee.

There are signs that the EVs subsidies will be announced in March, and the subsidy reduction is a certainty, but many other details need to wait until the the announcement of official version. It is good news that China Government is still encouraging EVs infrastructure investment such as Charging Pile Company from other aspects.