Manufacturing News

China raises subsidies to reward longer-range electric cars

China is increasing subsidies for electric vehicles that can travel farther on a single charge, while also making it more difficult for battery-powered vehicles to qualify for any new incentives under a central government plan.

The central government incentive for EVs with a range of 400 kilometers (249 miles) and beyond on a single charge has been raised to 50,000 yuan ($7,900) from 44,000 yuan, the finance ministry said in a statement Tuesday. At the same time, vehicles must be able to go at least 150 kilometers on a single charge to be eligible for incentives, up from 100 kilometers before.

Incentives have been key to making EVs more affordable in China, helping the market pass the U.S. as the world’s biggest in 2015. The Chinese government is leaning toward letting provinces continue with local subsidies for EVs to sustain the rising demand for new-energy vehicles in the country, Bloomberg reported.

The new rules, which took effect Monday, also cut subsidies by varying degrees for cars with a driving range of less than 300 kilometers, according to the statement. Separately, only EVs with battery energy density above 105 watt-hours per kilogram are eligible for the subsidies under the new rule. The threshold was raised from 90 watt-hours per kilogram.

The government also cut subsidies by as much as half for buses that qualify as new-energy vehicles, depending on the length and nature of the powertrain.

BYD Co. and other Chinese automakers including BAIC Motor Corp. and Anhui Zotye Automobile Co. have benefited from subsidies given by China as the nation tries to encourage production of less-polluting vehicles.

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