Li Keqiang’s pollution solution centres on government's role in pushing new-energy cars

PUBLISHED : Tuesday, 28 January, 2014, 11:16am
UPDATED : Tuesday, 28 January, 2014, 11:17am

Premier Li Keqiang says governments should actively promote vehicles powered by alternative energy, underlining a government policy that seeks to cut severe pollution through measures such as reducing car emissions.

“New-energy vehicles, especially buses, can help improve urban problems of pollution and noise and therefore everyone should be encouraged to use it,” Li said during a visit to mainland carmaker BYD’s plant in Xi’an, according to a Bloomberg report.

Last year, the National Development and Reform Commission, along with several ministries, announced a renewed incentive programme to promote the use of alternative-energy vehicles.

Under the scheme, buyers of electric cars can receive up to 60,000 yuan in direct subsidies while a rebate of 35,000 yuan will be offered to buyers of plug-in hybrid cars which can run on electric power for more than 50 kilometres. Buyers of fuel-cell electric vehicles, meanwhile, are entitled to a subsidy of up to 50,000 yuan.

The government also required big cities to achieve green-car sales of 10,000 units per year starting next year, while the target for smaller cities is 5,000 units – a drive that was expected to benefit mainland carmakers such as BYD and Dongfeng Motor.

Some analysts had cast doubt on the programme, saying it would have a limited impact on the sales of such cars and that the nation did not yet have an adequate supporting infrastructure to adopt the cars en masse.

The NDRC and ministries also said at the time that the subsidies would be gradually decreased over time.

BYD (whose initials stand for "Build Your Dreams"), backed by Warren Buffett’s Berkshire Hathaway conglomerate, said this month that it had failed to qualify for local incentives in Beijing and Shanghai. Government subsidies are important because of the high cost of building electric vehicles and charging stations.

Municipalities and provinces have set concrete targets to cut the concentration of air pollutants by 10 to 25 per cent in three years’ time.

With additional reporting from Kwong Man-ki