An industry group representing mainland carmakers expects the government to launch fresh incentives to help people buy green vehicles in the next few months, as part of efforts to create the market for the 500,000 plug-in hybrid and electric vehicles to be introduced by 2015.
Some analysts, however, say that no matter how much the government gives buyers, carmakers have difficulty claiming back the money and some have stopped selling their new energy models to curb losses.
Last year, the central government began giving buyers up to 50,000 yuan (HK$61,374) towards the cost of a plug-in hybrid vehicle and up to 60,000 yuan for electric vehicles.
Last month, some municipal governments said they will match the state's subsidies, up to a total of 120,000 yuan for an electric car. Green vehicles on the mainland start from 350,000 yuan.
Shi Jianhua, deputy secretary general of the China Association of Automobile Manufacturers, said the central government may announce plans this year to boost the incentives in light of government plans to raise production of the vehicles from less than 2,000 units last year to 500,000 in 2015 and 5 million by 2020.
'I don't think [the target] is unachievable,' Shi told the Automotive News China conference in Beijing yesterday. 'When the government sets a goal, they get it done through different administrative measures. In this case the government may introduce policies that encourage consumption by buyers.'
But John Zeng, forecasting director for the Asia-Pacific region at Shanghai-based LMC Automotive Consulting, said more incentives would not help. 'Some Shanghai-based manufacturers still haven't managed to claim back the incentives after one year, which has been causing them serious problems,' he said without naming them. 'I heard some have stopped selling those models to cut losses.'