Contribution for electric vehicles, disbursed for 13 years from 2009
30 trillion won in subsidies from BYD and Tesla
Expected sales of 9 million electric vehicles next year
[아시아경제 최대열 기자] China has decided to end subsidies for the purchase of electric vehicles from next year. It started in 2009 and spent about 30 trillion won for 12 years, and now judged that the domestic electric vehicle industry is competitive even without subsidies.
According to data compiled by the KOTRA Office in Shenyang on the 31st, the Ministry of Finance of China, the Ministry of Industry and Information Technology, the Ministry of Science and Technology and the National Development and Reform Commission, four ministries, issued purchase grants in the “Notice on Subsidy Policy for the Promotion of New Energy Vehicles in 2022. It was announced that it would only be paid by this day. New Energy Vehicles refer to pure electric vehicles and plug-in hybrid vehicles.
Since 2009, the Chinese government has provided subsidies to increase the adoption of electric vehicles. Unlike Korea, it was given to electric vehicle manufacturers. When a company informs the local government of its EV sales volume and applies for a subsidy, the government executes it after an expert review. As the price of the vehicle was reflected in the subsidy, the sale price was lowered and consumers were able to buy cheaper.
KOTRA said the subsidy received so far by Chinese electric car companies is a total of 160 billion yuan (about 29.528 trillion won). BYD, company no. 1 in China, received the most with 7 billion yuan (1.29 trillion won). American brand Tesla received 3.5 billion yuan (646.6 billion won).
China ranks first in terms of production and sales of existing electric vehicles and internal combustion engines. Despite the disruptions due to Corona 19 and intense quarantine measures, the production of finished cars has reached 21.7 million units and sales have reached 21.29 million units since the beginning, according to the China Automobile Manufacturers Association. from this year to last month.
The abolition of subsidies is a somewhat predictable result. Meanwhile, the amount has been steadily reduced to reduce benefit dependency. In the early days of the subsidy policy, up to 60,000 yuan (11.26 million won) was paid per unit, but in 2017, the limit was reduced by 20%. In 2019 it decreased by 40% compared to the previous year and this year by 30% compared to last year.
The standards for subsidies have also been raised. In 2018 subsidies were granted only to vehicles with a cruising range of 150 km (distance that can be traveled on a single charge). The standard was raised to 250km in 2019 and 300km recently.
KOTRA predicted that selling prices would rise as subsidies were eliminated. BYD raised the price up to 6,000 yuan (1.11 million won) and Aian, a subsidiary of Guangzhou Motor Company, recently decided to raise the price up to 8,000 yuan (1.48 million won).
Sales of EVs next year are expected to rise 35% from this year to 9 million units. In this case, EVs’ share of all new cars sold will rise to 32.6%. This means that one in three cars is an electric car. While the price competitiveness of local companies is expected to decrease somewhat due to the abolition of subsidies, KOTRA predicted that new opportunities will arise for domestic finished car makers and battery companies that have had difficulty entering the market. local market due to subsidy issues.
Reporter Choi Dae-yeol [email protected]
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China to eliminate subsidies for electric vehicles