China is quietly reinforcing its car industry, pushing a range of support measures and levers to help salvage its world-leading push into electric vehicles.
The coronavirus pandemic and oil-price slump slammed the nascent industry for EVs, which until this year looked like the undisputed future of transportation. Sales have declined for 10 straight months in China and are forecast to drop 14% this year to fewer than 1 million units, according to BloombergNEF. But rather than abandon an industry it plowed billions of dollars into while becoming the biggest global market for new-energy cars, China’s government is doubling down.
More than 20 provinces, as well as the central government, have rolled out packages meant to stimulate demand for EVs. And that’s had an effect: the sales decline started to show signs of easing in recent months.
Here are the key actions taken by China:
STIMULUS POLICY BY CENTRAL GOVERNMENT
Local governments urged to spur sales with measures including increased quotas for license plates
Local governments mandated to accelerate replacement of aging vehicles and shift policies from limiting car purchases to regulating usage
Ministries call on local governments to subsidize car purchases and facilitate trading of used cars
State Council extends funding and purchase-tax rebates on new-energy vehicles for another two years, grants fiscal support for replacing older vehicles, lowers value added tax for used-car trading
Financial institutions are encouraged to reduce down payments and interest rates on car loans and extend repayment periods
Premier Li Keqiang says China will promote construction of charging facilities to spur EV sales
Source: government announcements
PROVINCES AND CITIES IMPLEMENTING POLICIES
Subsidies for new-car purchases
As much as 10,000 yuan handed out to rural residents who buy approved new-energy vehicle models in Guangdong province
Shanxi provides as much as 8,000 yuan to consumers who buy vehicles made there
Shanghai gives consumers who buy their first new-energy vehicles 5,000 yuan to help cover electricity costs
Hunan, Sichuan and other provinces provide fiscal support for vehicle purchases
Increase of license-plate issuance
Guangzhou, Shenzhen and Hangzhou boost their annual license-plate quotas by as many as 10,000 this year
Encouraging replacement of aged vehicles
Zhejiang, Jilin, Chongqing and Sichuan are among those offering as much as 5,000 yuan in support to those trading in vehicles for new ones
Electrification of public transportation
Shanghai and others plan to replace buses and taxis with new electric vehicles