The Chinese government may resume giving subsidies to buyers of electric vehicles as early as April, the chairman of BYD Co Ltd. told Reuters. BYD has an existing partnership with Daimler AG to produce battery-powered cars. Chuan-Fu Wang said that China is establishing standards that may be announced in April or May.
China terminated the previous subsidy on Dec. 31, 2012, providing it from 2010 until last year. Buyers of electric cars received incentives of CHY60,000 ($9,700) from the government as China sought to fight pollution and reduce its dependence on oil.
However, electric cars remain uncommon in the country due to lack of charging facilities as well as high battery costs. A resumption of the subsidy program, which has been expected by industry insiders and experts, would be in line with China’s so-called new energy policy that targets to have around 500,000 “new energy cars” ply Chinese roads by 2015 and around 5 million by 2020.
China announced the new energy policy in July 2012.The Chinese government defines new energy cars as all electric battery cars and plug-in hybrids. It does not include conventional gasoline-electric hybrids like the Toyota Prius.
China has made commitments to those goals to jump-start demand for electric cars, industry executives say. Beijing is also unlikely to waver on those goals since not a year has passed since it formalized the 2015 and 2020 objectives. Industry executives remarked that for China reach these goals, it needs to widen the definition of new energy cars to include conventional gasoline-electric hybrids.