Chinese authorities are reportedly discussing extending the payment with electric vehicle companies regarding the payment of electric vehicle subsidies that expire this year.
Citing industry sources, Reuters reported on the 18th (local time) that Chinese officials are considering such measures amid a sharp slowdown in car sales due to the blockade caused by COVID-19.
China’s automobile production in April plunged 43.5% from the same period last year in the aftermath of the “Shanghai blockade” under the Zero Corona policy. In particular, according to data from the Shanghai Automobile Sales Association, in the case of Shanghai, all dealerships were closed last month, and automobile sales in Shanghai recorded “0.”
A source, who asked not to be named, told Reuters, “Government ministries such as China’s Ministry of Industrial Information and Information (MIIT) are considering continuing subsidies for electric vehicles in 2023.”
China’s electric vehicle market has formed the world’s largest electric vehicle market through subsidies. “Since subsidies began in 2009, about 100 billion yuan ($14.81 billion) has been paid to buyers by the end of 2021,” said automobile analyst at China Industrial and Commercial Bank of China.
Sources said details such as the amount of subsidies and vehicles eligible for support have yet to be finalized. China’s electric vehicle subsidy system was originally scheduled to be phased out by the end of 2020, but it had been extended for two years to promote demand after COVID-19. Despite the blockade and subsidy cuts in major cities due to the spread of COVID-19, China’s electric vehicle sales rose 143% year-on-year to 1.115 million units in the first quarter of this year.
The Ministry of Commerce and the Ministry of Finance did not immediately respond to requests for comment on extending subsidies for electric vehicles, Reuters added.
