The new bonuses criteria for the purchase of NEV, in China for the period 2020-2022
- The purchase bonus system put in place by Beijing from 2015 resulted to a rapid growth in sales of electric and hybrid cars (known as NEV for New Energy Vehicles) which went from 352,000 units in 2016 to 600,000 in 2017 and then to 1,102,000 in 2018. The objective, as for each subsidies, is to support the growth of a new market. However, since 2019, the government had announced the gradual end of this purchase bonus system, in order both to transfer the budget dedicated to bonuses in favour of recharging infrastructures, but also in order to "clear-out" the market, by keeping only viable carmakers and eliminating small ones who live only on subsidies.
- In mid-2019, the Chinese government announced a reduction by half of these bonuses. The subsidy which was 6,600 euros per car has dropped to 3,300 euros. As a result, in 2019, sales stagnated at 1,177,000 units.
- For the period 2020 - 2022, the Chinese government has announced that it will reduce these subsidies again by 10% (but initially cancelled). The bonuses will therefore amount to 3,000 euros per vehicle. They will be further reduced by 20% in 2021 and by 30% in 2022. In addition, the conditions to get access to theses bonuses have been restrictive: to qualify, a vehicle must have a range of at least 250 km, against only 150 km previously, which eliminates a number of models that were previously proposed by Chinese carmakers. In addition, eligible vehicles must cost less than CNY 300,000 (approximately € 36,500). These measures aim, according to the Chinese government, to force Chinese carmakers to be more innovative and competitive in this emerging segment, but at the same time not favouring the more expensive foreign vehicles. Also, regional and provincial governments have been pushed to also cease their own subsidies for electric vehicles, to focus instead on financing recharging infrastructure.
- Combined consequences of the new bonus politic and the COVID-19 crisis, in the first half of 2020, 360,000 NEVs found customers, i.e. a potential of around 800,000 units over the whole year, which is equivalent to a decrease of 30% compared to 2019.
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