China to bar municipalities from using EV subsidies favoring local automakers
China's central government plans to issue a directive that would curb the allocation of subsidies for green vehicles by local governments, the 21st Century Business Herald reported.
Last month, China's Ministry of Industry and Information Technology told municipal officials that the ministry would bar sales subsidies that favored local electric vehicle and plug-in hybrid producers, according to the Herald, a daily business newspaper in the south China city of Guangzhou.
City officials were told that the ministry will centralize control of subsidies for green vehicles, the newspaper reported, citing an unnamed city official who attended the meeting.
In 2010, the central government started subsidizing sales of domestically built EVs and plug-in hybrids. The subsidies range up to 57,000 yuan ($9,120) for an EV and 33,250 yuan for a plug-in hybrid.
The central government also requires cities to match nationwide incentives with municipal subsidies.
But the central government allowed local protectionism to run rampant under the program. For example, Beijing's city government has made plug-in hybrids ineligible for the subsidies -- a policy that benefits Beijing Automotive Industry Holding Co., which only produces EVs.
Meanwhile, Shanghai and Shenzhen set standards for vehicle range and maximum speed that effectively exclude EV producers from other regions.
The protectionist policies have hobbled the sale of EVs and plug-in hybrids. In the first three months of 2014, only 4,095 EVs and 2,758 plug-in hybrids were sold nationwide, according to the China Association of Automobile Manufacturers.
City officials were told that the ministry will centralize control of subsidies for green vehicles, the newspaper reported, citing an unnamed city official who attended the meeting.
In 2010, the central government started subsidizing sales of domestically built EVs and plug-in hybrids. The subsidies range up to 57,000 yuan ($9,120) for an EV and 33,250 yuan for a plug-in hybrid.
The central government also requires cities to match nationwide incentives with municipal subsidies.
But the central government allowed local protectionism to run rampant under the program. For example, Beijing's city government has made plug-in hybrids ineligible for the subsidies -- a policy that benefits Beijing Automotive Industry Holding Co., which only produces EVs.
Meanwhile, Shanghai and Shenzhen set standards for vehicle range and maximum speed that effectively exclude EV producers from other regions.
The protectionist policies have hobbled the sale of EVs and plug-in hybrids. In the first three months of 2014, only 4,095 EVs and 2,758 plug-in hybrids were sold nationwide, according to the China Association of Automobile Manufacturers.
