NEW NEV Subsidies Expected in Oct. as Fraud Crisis Fades
Yicai Global
/SOURCE : Yicai
NEW NEV Subsidies Expected in Oct. as Fraud Crisis Fades

(Yicai Global) Sept. 28 -- Introduction of the 2016 new energy vehicle (NEV) subsidy is expected in Oct., and this may end the industry's subsidy problems.

Ms. Liu Ying, director of the Beijing office of the China Automotive Industry Research Institute, said recently in Shenzhen that introduction of the 2016 NEV subsidy was originally set for July 2016, but the complexity of the fraudulent acts has delayed its implementation, now expected in Oct. The fraud is alleged to have occurred in the 2012-2015 period.

On Sept. 8, the Ministry of Finance released the results of its investigation into five bus manufacturers -- Suzhou GEMSEA Coach Manufacturing Co., Higer Bus Company Ltd. [SH:600686], Shenzhen Wuzhoulong Motors Co., Chery Wanda Guizhou Bus Co. and Henan Shaolin Bus Co. -- for subsidy fraud of USD150 million (CNY1 billion).

Ms. Liu pledged constant improvement in the requirements for market access and subsidies for NEVs, with specific requirements developed for energy consumption, battery capacity and subsidy caps, while cancellation of local subsidies will become a general trend as the overlap of central and local government subventions leads to excess grants. Complete cancellation of government support is expected by 2020, with market mechanisms instituted thereafter to fuel the development of NEVs.

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