China Bypasses Hybrids As It Reinstates Higher EV Incentives

Citing the desire to curtail air pollution, the Chinese central government has approved subsidies for buyers of electric cars and commercial buses while reducing the incentives for hybrids and plug-in hybrids.

If Americans think President Obama’s goal of 1 million EVs and PHEVs on U.S. roads by 2015 is a stretch, and not likely to be met on time, China has an ambitious goal of its own: 5 million electric cars by 2020.

As of the end of 2012, the total in China however was 27,800 EVs.

To spur buyers toward the mark, China will offer $9,800 (60,000 yuan) to EV purchasers, and money available for electric buses could rise to as much as $81,680 (500,000 yuan). Fuel cell vehicles – included for the first time in Chinese incentive policy – could also receive as much as 500,000 yuan in rebates.

This is according to a statement made by the National Development and Reform Commission and finance, science and industry ministries noted in a report by a Bloomberg correspondent in Beijing.

But, says the report, hybrids – seen by some as a needed bridge technology – are essentially getting the short shrift with incentioves of $490 (3,000 yuan) under a different policy plan.

“The new policy is basically the same as the previous one and doesn’t really address the underlying problems,” said Han Weiqi, an analyst with CSC International Holdings Ltd. in Shanghai, to Bloomberg of the EV incentives “Unless there are follow-up measures to step up support for hybrids, today’s policy is not expected to spur the EV market.”

Notwithstanding mildly critical views, according to the finance ministry’s Web site, the new central government policy for EVs focuses on three regions anchored by Beijing, Shanghai and Guangzhou using subsidies through 2015.

Targets have also been set for local authorities to have a minimum of 30 percent of new-energy vehicles made by automakers based outside their jurisdictions. China’s government planners also directed public agencies to lead in the use of alternative-energy vehicles.

According to Han at CSC International, the subsidies for electric passenger vehicles, including plug-in hybrids, will be lowered by 10 percent in 2014 and by 20 percent from this year’s level in 2015. This is intended to encourage automakers to lower the costs of their plug-in cars.

In July 2011 China Car Times offerd its own view on why the Chinese central planners are pushing heavilty for domestic EVs over hybrids.

Essentially, the writer said the Chinese government wants “new energy cars” over hybrids because the domestic makers won’t likely catch up to technology offered by European, American, or Japanese automakers.

Bloomberg