China, home to some of the world’s most polluted cities, reduced the size of subsidy cuts to electric vehicles for the coming two years and will extend the incentives beyond 2015 to help lower emissions.
Subsidies for 2014 will be cut by 5 percent, instead of the previously announced 10 percent, and decreased by 10 percent in 2015, instead of 20 percent, the finance ministry said in a statement on its website on Feb 8. The subsidies will continue after the current programme expires at the end of 2015, it said.
Pressure is mounting for China to contain air pollution, which reached record levels in Shanghai last year and prompted many cities to introduce emergency measures, including restricting the use of vehicles on heavily polluted days. Tailpipe emissions have come under scrutiny as China became the first country to report annual vehicle sales exceeding 20 million units last year.
Premier Li Keqiang said during a visit to electric carmaker BYD Co. last month that local governments should take a leading role in promoting the use of alternative energy-powered vehicles. The nation is lagging behind its target to have 5 million of the vehicles by 2020 because of a lack of charging stations and high costs.
The government announced in September it would gradually decrease subsidies as it renewed its current programme, which provides as much as 60,000 yuan toward the purchase of an all-electric passenger vehicle and as much as 500,000 yuan for an electric bus.
The central government also set targets for local authorities to have at least 30 percent of new-energy vehicles made by automakers based outside of their jurisdictions.
To combat air pollution, China’s State Council, or cabinet, released a national plan in September that called for a 15 percent to 25 percent reduction in particulate matter by 2017 in the three key manufacturing regions anchored by Beijing, Shanghai and Guangzhou.