(Yicai Global) May 31 -- China rejected 30 percent of applications for new-energy vehicle subsidies last year as regulators toughened criteria for eligible cars.

The failure rate was only 2 percent in 2016, according to data released by the Ministry of Industry and Information Technology. Many of the setbacks affected major domestic carmakers, including Beijing Electric Vehicle, Geely Automobile Holdings, SAIC Motor, JAC Motors and Chery Automobile.

China has been raising subsidy thresholds and tightening supervision since last year, sapping profits at top electric vehicle manufacturers, such as BYD Auto, Yutong and JAC. Just a week ago, the ministry unveiled a list of 1,882 new-energy vehicles that were no longer eligible for a sales tax waiver as it looked to cut state spending and stop carmakers submitting phony claims.

The Chinese government has been subsidizing the NEV industry since 2013 and provided around CNY50 billion (USD7.8 billion) worth of discounts through 2015, with around CNY20 billion coming from local authorities. Since then, the central government alone has put up nearly CNY45 billion in grants.

Common reasons for vehicles being rejected for subsidies include them not being registered with government regulation platforms, not meeting mileage requirements, and having components that are inconsistent with government requirements, the ministry said. A number of carmakers are liaising with government departments as they look to cling on to the discounts.

Editor: James Boynton