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Electric cars: China’s EV buyers may receive cash subsidies from local governments aiming to bolster industry walloped by Covid-19 lockdowns, say analysts
- Analysts said that Jilin and local authorities in East China’s Yangtze River Delta, such as Shanghai, Jiangsu and Zhejiang will probably grant cash subsidies
- It follows Guangdong’s move to give buyers of a new electric car to replace another vehicle a subsidy of 10,000 yuan (US$1,513) in May and June
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China’s local governments are likely to reintroduce cash subsidies to bolster sales of electric vehicles (EVs) after the industry took a savage hit from the Covid-19 outbreak, said analysts.
Provincial-level governments may distribute billions of yuan to buyers of battery-powered cars in the coming months after southern China’s Guangdong province spearheaded the move last week to support battered automotive companies.
“Cash subsidies can give carmakers a shot in the arm and generate multi-billion-yuan sales,” said David Zhang, a researcher at the North China University of Technology. “Lockdown measures have caused severe damage to the once buoyant sector and it is necessary to spur sales of EVs through strong incentives.”
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Local governments had previously offered cash incentives to buyers but were ordered by Beijing to stop doing so in 2019.
In the last two months lockdowns in Shanghai, mainland China’s motor industry hub, and Changchun, the capital of northeastern China’s Jilin province, exacerbated automotive supply chain bottlenecks and deterred consumers from buying electric cars, threatening to knock the sector off its feet.
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Sources at car manufacturers and dealers said they are lobbying local governments to follow Guangdong’s move.
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