China In Talks With Automakers On EV Subsidy Extension as per the Reuters report.
On May 22, China is in talks with automakers about extending costly subsidies for EVs that were set to expire in 2022.
China is in talks with carmakers about the extend costly subsidies for Electric Vehicles
To report, China is planning to push the market progress because the broader financial system slows.
The event comes at a time when the world’s second-largest financial system is witnessing a decline in its automobile gross sales.
Government departments including the Ministry of Information and Industrial Technology (MIIT) are considering a continuation of subsidies to EV buyers in 2023, said the people, who declined to be named as the discussions were private as per the Reuters.
China’s expensive incentive program has been credited with creating the world’s largest EV market.
According to Shi Ji, auto analyst, CMB(China Merchants Bank International), the subsidies market began in 2009, and some 100 billion yuan ($14.8 billion) have been handed out to buyers including commercial fleet operators up to the end-2021.
In the year 2022, the government had planned to raise the tax to 10% of the purchase price in 2023. Instead, the rate would be raised to just 5%, but there is no purchase tax on these vehicles.
In the China Electric vehicle market, smaller battery-powered city cars, most of which don’t qualify for subsidies, make up 40% of EV sales, according to auto consultancy JATO, and cost on average just under $4,000. That compares with more than $26,000 in the United States(U.S) for equivalent models, Subsidies are now targeted at bigger models, with a driving range of more than 300 kilometers per charge and priced under 300,000 yuan ($44,459).
Plug-in electric car sales in China – March 2022
The total plug-in electric car registrations increased by about 153% year-over-year to over 3.2 million (from 1.27 million in 2020). In 2022, the total volume might reach 5-6 million, according to some forecasts.