The Chinese government had been providing enthusiastic support for electric cars but it might end soon with the government planning to discontinue its subsidies for electric cars. In order to control and reduce China’s growing air pollution various government, local, state and national entities provided various subsidies and incentives these years. The new decision comes after the decrease in sales of electric car sales in the country.
However, the national government existing subsidy plan will end in 2021 and it doesn’t look like they wish to extend the plan after it expires. The information was revealed by the Finance Minister Lou Jiwei. Finance Minister also stated that subsidies will be cut by 20 percent over the next years followed by 40 percent cut in 2019 and 2020 before the government completely stops it by 2021.
Minister also stated the reason to eliminate subsidy is because companies are now expecting to grow on government subsidies. He also appreciated California’s emission credit system that allows manufacturers to buy credits to offset excess emissions.
Tesla had made use of the emission credit system to full advantage by selling credits to other electric car manufacturers to earn extra profits. However, China doesn’t have a similar system in the country and it is not clear if it would follow the footsteps of the American counterpart.
Car manufacturers in China that focus on plug-in hybrid and electric cars are doubtful if electric cars would ever become the main stream car on Chinese roads. China had more electric cars and plug-in hybrid sales last year compared to the United States.