Subsidies for new energy cars expected to be cut again in China

Subsidies for new energy cars will be cut further this year before being phased out in China altogether by the end of 2020, Thursday's China Daily reported.

A man charges his new energy car at an underground parking lot in Beijing on December 28, 2017. [File photo: VCG]

"The move was scheduled to be released by the end of 2017, but there was some controversy and hence has been delayed for a while," Wu Zhixin, vice-president of the China Automotive Technology & Research Center, which participated in drafting the plan, was quoted as saying.

The ministries concerned, including the Ministry of Finance and the Ministry of Industry and Information Technology, have reached a consensus on the final draft and submitted it for final approval, according to Wu.

Wu did not give details about how much the current subsidies would be cut but said cars qualified for subsidies in 2017 would have their eligibility extended for around four months into this year, the newspaper reported.

China has been offering financial incentives since 2010 to stimulate the popularity of new energy cars. 

Wu told the newspaper that subsidy cuts will see small and uncompetitive players wiped out faster than expected but outstanding performers would not be affected much.

The China Association of Automobile Manufacturers estimated that new energy car sales would grow at around 40 percent to exceed 1 million units in 2018. More than 777,000 units were sold last year in China, a 53 percent surge year on year.