(Yicai Global) June 12 -- China's new subsidy policy for new energy vehicles has come into effect today after a four-month transition period. Long-range NEVs will enjoy higher subsidies, while those with a battery range of less than 150 kilometers will no longer receive subsidies as the government aims to streamline the market.

The new policy has a clear orientation to prompt automakers to quickly upgrade products and to promote the development of the Chinese NEV industry. The relevant government agencies already made it clear earlier that China will scrap subsidies for NEV buyers by 2020.

In the first quarter of this year, 143,000 NEVs were sold in China, up about two and a half times compared with the same period last year, according to the ministry of industry and information technology.

Annual production and sales of NEVs in China topped the world from 2015 to last year due to favorable policies and demand from environmentally-conscious customers, state-run Xinhua News Agency reported, citing data from the ministry. By the end of last year, cumulative sales had exceeded 1.8 million, accounting for more than half of the global total, it said.

In February, the ministry of finance and other three departments jointly issued a circular on adjusting and improving fiscal subsidy policy to promote NEVs and proposed a new subsidy plan. The circular prescribed a four-month transition period, which ended yesterday.

According to the new plan, all-electric cars with 150 to 300 kilometers of range will have their subsidies lowered by 20 to 50 percent; models with a battery range of less than 150 kilometers will no longer receive subsidies; but those with a battery range of above 300 kilometers of range will see their subsidies increased by 2 to 14 percent.

Editor: Mevlut Katik