Cars exhibited at the Kowloon Bay integrated Auto Mall. Photo: Asia Times
Cars exhibited at the Kowloon Bay integrated Auto Mall. Photo: Asia Times

China’s Ministry of Industry and Information Technology, Ministry of Finance, Ministry of Science and Technology and the Development and Reform Commission began studying new policies to prevent a cliff-like decline in new energy vehicle sales after the country stops all financial subsides to the sector by 2020, Caixin reported.

The China Automotive Technology & Research Center, SAE-China and China EV100 will be commissioned by the four ministries to provide policy recommendations, the report said.

“The withdrawal of subsidies does not mean that the new energy vehicle industry will receive less support, but the government will introduce a more long-term and systematic supporting policy,” Wu Wei, Director of the Industry Coordination Division of Mechanical Equipment Department under the Development and Reform Commission, said at an international forum on Saturday.

Liu Bin, Director of the New Energy Automotive Finance and Taxation Policy Research office at the China Automotive Technology & Research Center, suggested that in the “post-subsidy” era, policies should encourage the purchase of new energy vehicles and highlight their positive push on China’s economy.

BMW Brilliance Automotive, on the other hand, said China’s new energy vehicle policy system is complex, and that different policies are usually not unified. Policy adjustment is also frequent and thus has brought difficulties for product development. The company hopes that the future policy can be solidified through legal means.

The Chinese government stated it would provide financial subsidies to new energy vehicles in 2010. With the support of subsidy and supporting policies, as of the end of 2016, China has sold more than 1 million new energy vehicles and became the leading country in sales.

According to the previous plan, financial subsidies on new energy vehicles will be completely withdrawn by 2020.