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China to phase out subsidies for green energy vehicles

Updated: Jan 25,2016 3:24 PM

China’s subsidies for green energy vehicles will be gradually phased out to let the market decide products.

At an industry conference on Jan 23, Finance Minister Lou Jiwei said companies could grow dependent on subsidies and develop products accordingly. He said the government plans to reform the current subsidy policy in a market-oriented direction.

“We will raise the threshold of subsidies and target support at efficient companies. The standard will be raised in terms of vehicle safety, reliability and consistency as well as technical perimeters of key parts,” Lou said.

“The policy will be adjusted with reference to the trend of international and domestic industrial development, especially that of green energy vehicles in countries with a strong auto industry.”

The Finance Ministry will cut subsidies by 20 percent over the next two years and 40 percent by 2019-2020, eliminating them altogether after 2021.

Green car sales more than quadrupled in 2015 with the market finally taking off after years of subsidies and preferential government policies. China has become the world’s largest market for electric cars, surpassing the US.