Chinese Carmakers Spring to Action Before NEV Subsidies Wilt Again Next Year
Li Suwan
DATE:  Dec 14 2018
/ SOURCE:  yicai
Chinese Carmakers Spring to Action Before NEV Subsidies Wilt Again Next Year Chinese Carmakers Spring to Action Before NEV Subsidies Wilt Again Next Year

(Yicai Global) Dec. 14 -- Chinese carmakers are looking to shift as many electric vehicles as possible before the end of the year, when new-energy vehicle subsidies are rumored to shrink as much as 40 percent.

Zhejiang Geely Holding Group, best known internationally as the owner of Volvo's car brand, has been pushing to shift certain electric models since Dec. 12, offering to fix prices and offer a prompt delivery once buyers put down a deposit. Emerging carmaker Xpeng Motors also released its G3 model the same day, in hopes of racking up sales before the firm needs to jack up prices.

It is possible the G3 price will be affected, said Chief Executive He Xiaopeng, adding that there is a lot of uncertainty surrounding next year's NEV subsidies.

Online rumors began circulating online earlier this week suggesting the subsidies will fall by as much as 40 percent, but Cui Dongshu, secretary-general of the China Passenger Car Association, told Yicai Global yesterday that this has yet to be confirmed. Chen Shihua, assistant secretary-general of the China Association of Automobile Manufacturers, concurred, but he believes a major cut on grants in the new-energy vehicle sector next year is inevitable.

Both traditional and emerging carmakers will be paying attention to the subsidy cuts, but it is the new manufacturers, which produce solely electric cars, that are likely to be the hardest hit. Several have rolled their newest models off the ramp this year, including Nio and WM Motor, as they look to rack up sales before the grants are all but gone.

But this could lead to quality concerns, according to Ouyang Minggao, vice executive chairman of industry think tank China EV100. There have been a host of fires and other accidents related to electric cars this year, with lithium batteries being the main issue, he said.

NEVs are not strictly in compliance with relevant technical standards during the design, manufacturing and testing processes, or even when being used, he added, saying some makers lack the ability to test their batteries properly.

Leading Growth

China has been cutting NEV subsidies since the beginning of last year, when grants fell by about 20 percent over the course of the year. This year, the adjustments were targeted at certain vehicle categories, but the government still plans to have abolished the grants by 2020.

Sales of NEVs were a beacon of light among a grim month for passenger cars last month, growing 10.4 percent on the month and 56 percent on the year to 136,000 while the industry-wide figure slumped 18 percent annually to two million units.

Some 886,000 electric cars sold through the first 11 months, potentially paving the way for the annual total to surpass one million for the first time, according to data from the CPCA.

Editor: James Boynton

Follow Yicai Global on
Keywords:   New Energy Vehicles,Subsidies