On September 17, 2013, the Ministry of Industry and Information Technology (MIIT) releases the Notice on Continuing the Promotion of New-energy Vehicle (the Notice hereinafter) jointly issued by the Ministry of Finance, the Ministry of Science and Technology, MIIT, and National Development and Reform Commission. The long-awaited new subsidy policy for new-energy vehicles is finally settled down. The new subsidy policy presents the following ten highlights.
Highlight 1: pilot regions are enlarged
Based on previous 25 pilot cities in the project of “1000 units for each of ten new cities”, the Notice adds more cities and enlarges the coverage of pilot cities by radiating to surrounding cities to form a large area that applies the promotion of new-energy vehicles. In the pilot cities or regions, double subsidies from both local and central government will be paid.
Highlight 2: the promoted target is increased
According to the Notice, from 2013-2015, large pilot cities or key regions should accumulate to promote at least 10,000 units, while others promote at least 5000 units. In addition, this time the promotion doesn’t take one pilot city as a unit. The new-energy vehicles and infrastructure in one region should be shared and commonly used. There are no limitations on numbers and setting on promotion cities and regions.
Highlight 3: pilot cities could be eliminated
In the previous pilot project, there is no punishment on cities that don’t complete their target. In last round of promotion, some cities among the 25 have only promoted about 100 units, far from the initial target. The Notice thus requires pilot cities should accept yearly assessment and those that fail to fulfill targets will be eliminated from the list.
Highlight 4: subsidy is allocated to auto maker from the central finance
In previous subsidy for new-energy vehicle, the subsidy is provided by the local government of the place where the sale is completed. Such a method put non-local vehicle makers in a tough situation in applying subsidies but enables the government to give priority to local makers. The Notice requires clearly that vehicle makers apply for subsidies to the government of their registered government. By doing so, new-energy vehicle makers are encouraged to enter private consumption markets.
Highlight 5: procurement of public vehicles should be firstly new-energy vehicles
The Notice states very clear that new-energy vehicle is the first choice of procurement of government and public vehicles, and it should take up at least 30% in the new and updated public vehicles, official affair vehicles, and logistics and sanitation vehicles. Definite political measures have been issued by local governments in terms of allocation of new-energy vehicles, public vehicles and assorted facilities.
Highlight 6: subsidy for passenger vehicle depends on mileage
In the previous policy, private procurement of new-energy vehicle relies on the energy of battery package, while now it is changed to the mileage in vehicle’s pure electric mode. According to the Notice, private buyer can get different levels of subsidies: 35,000 yuan, 50,000 yuan and 60,000 yuan. The new policy helps to see the performance of new-energy vehicles, facilitating to lead R&D direction of vehicle makers and understanding of consumers. The subsidy for commercial vehicles is similar to the passenger vehicle, and the price is around 10%-20% of a new-energy vehicle
Highlight 7: a subsidy withdrawing mechanism is launched
The fiscal subsidy driving industrial progress will lead to vehicle makers to form reliance on subsidies, thus a clear target and withdrawing mechanism is launched. According to the Notice, the subsidy policy is from 2013 to 2015, and from 2014, the subsidy reduces each year. In 2014 and 2015, full-electric passenger vehicle, plug-in hybrid (including range-extendeds) passenger vehicle, special vehicles and fuel battery vehicles will enjoy a subsidy 10% and 20% fewer than the base in 2013. The subsidy for full-electric and plug-in hybrid (including range-extended) public buses remain the same.
Highlight 8: subsidy on fuel battery vehicle is added
The vehicles enjoying the subsidy policy are increased, such as special vehicles for post, logistics and sanitation as well as fuel batter vehicles. The fuel-oil hybrid vehicles are not included in the list, typically Honda and Toyota brands.
Highlight 9: break out the local protectionism
In line with the local protectionism and monopoly in last term of promotion, the Notice requires at least 30% of the promoted vehicles should be from other places. The local government shouldn’t set obstacles to limit enterprises purchasing vehicles from other places.
Highlight 10: medium electric bus can get subsidy
In last subsidy term, only electric bus above 10m can get subsidies. In this term, 6m-8m electric bus can get 300,000 yuan, 8m-10m electric bus can get 400,000 yuan and above-10m electric bus can get 500,000 yuan. This provides public bus companies more options.
