China slashes EV subsidies

Electric-car development could be put at risk after the world’s biggest car market slashed its EV subsidies this week.

China has been the world’s most enthusiastic driver for electric cars, with mandated government EV quotas for manufacturers and subsidies to accelerate development.

But the Government is already slashing EV subsides and plans to withdraw them entirely by 2020 – but it will retain the EV quotas, currently at 12 percent of a company’s sales mix and rising every year.

More than 1.2 million electrified cars (including plug-in hybrids) were sold in China last year.

Most Chinese carmakers (and there are almost 500, most of which the outside world has never heard of) had built the subsidy cut into their business plans, but some of the smaller operations were caught off guard, according to Chinese media.

The minimum EV range needed to qualify for the subsidy has bumped up from 150km to 250km, though at the other extreme the subsidy for cars with more than 400km of EV range will be cut from RMB 50,000 to RMB 25,000.

Another huge change will be that the range estimates will be derived from the new Worldwide Light Vehicle Harmonized Test Protocol (WLTP) rather than the credibility-shy New European Driving Cycle (NEDC), taking the test range out of the laboratory and on to real roads.

More than half of the world’s electric cars are built in China, the world’s biggest car market, and the Government insists the subsidies are disappearing because the industry’s EV technical innovation is now mature.