Beijing mulls tax waiver and more subsidies for green car users

Development of green vehicles important, says vice-premier in announcing incentives for sector

PUBLISHED : Thursday, 03 April, 2014, 5:16am
UPDATED : Thursday, 03 April, 2014, 5:16am

The central government is mulling further incentives to boost the usage of new energy cars by waiving the purchase tax and extending a subsidy programme, Vice-Premier Ma Kai said in remarks made recently in Shenzhen that were posted yesterday.

"The development of new energy cars is an important issue for the country's energy safety, air pollution control and the car industry," Ma told delegates attending a conference.

He said the government would consider the purchase tax exemption, while the subsidy programme could be extended beyond next year.

More subsidies for hybrid buses and providing them with fuel subsidies would be studied further, he said.

The government would also accelerate the building of charging stations.

The finance ministry renewed the green car subsidy programme in February with subsidies cut by 5 per cent, less than the previously planned 10 per cent. The subsidies will be cut by a further 10 per cent next year instead of 20 per cent. No details on the programme have been set beyond that.

Other incentives, such as unifying insurance premium rates for new energy cars, reduction of toll charges and imposing emission surcharges to spur investment in electric vehicle development, were under consideration, Ma said.

He also said that local protectionism should be avoided.

"No local directory [on new energy car models that can be sold in a particular city] should be made to limit competition and to keep away carmakers from other places," he said.

John Zeng, a director at consultancy LMC Automotive, said Ma's remarks revealed the government's determination to push forward the development of the green car sector.

"The government has addressed the problem of local protectionism, which I think is the major obstacle to promote the usage of new energy cars," Zeng said.

Shenzhen-based BYD's approval in February to sell electric vehicles in Beijing and Shanghai could be seen as a sign to eliminate local protectionism, he said.

Ma visited Shenzhen and Anhui province in January to study the operation of new energy car manufacturers and battery makers.