Future of transport

China expects ‘handsome growth’ in 2017 sales of new energy vehicles

Industry minister optimistic despite steep dive in January sales

PUBLISHED : Saturday, 18 February, 2017, 10:01pm
UPDATED : Saturday, 18 February, 2017, 11:20pm

Sales of new energy vehicles (NEVs) in China will continue to see “handsome growth” this year despite a plunge in January sales, Xinhua reported on Friday.

“Carmakers are increasing research and development with more investment, and an array of new products will hit the market this year,” Miao Wei, the minister of industry and information technology, was reported as saying.

China sold 507,000 NEVs last year, the most in the world for a second year and up 53 per cent from 2015, according to the China Association of Automobile Manufacturers (CAAM), the country’s top automotive industry body.

However, sales plunged 74.4 per cent in January, as the government tightened subsidy policies after discovering that some companies were cheating on subsidies.

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Last year, the CAAM slashed its annual forecast for the country’s new energy vehicle sales by a steep 43 per cent after Beijing slapped penalties on several carmakers over a near 10 billion yuan (US$1.46 billion) subsidy fraud scandal that has rocked the world’s biggest car market.

Earlier this month, the ministry also suspended the rights of seven NEV manufacturers to recommend models for subsidies, punishing them for cheating.

The government plans to cut subsidies on NEVs by 20 per cent in 2017-2018 from the 2016 level before phasing them out by 2020.

“Development of China’s NEV market is keeping up with global development,” Miao said, adding that subsidies granted in the initial stage had been invaluable.

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The ministry would continue to adjust subsidy policies with the finance ministry, raise the threshold for corporate and product entry, and enhance online supervision over NEV sales and use, he said.

In a major blow to China’s booming electric vehicle industry, which benefited from 30 billion yuan in subsidies last year alone, Beijing said four carmakers had cheated authorities by padding out their claimed new energy vehicle sales, while one bus manufacturer fraudulently received allowances without producing any electric vehicles.