Phas­ing out sub­si­dies puts green cars on right track

China Daily (Canada) - - LIFE -

has said it will cut sub­si­dies to newen­ergy ve­hi­cles by 20 per­cent this year from 2016 lev­els, and urged lo­cal gov­ern­ments not to of­fer sub­si­dies that ex­ceed 50 per­cent of those pro­vided by the cen­tral gov­ern­ment. Changjiang Daily com­mented onWed­nes­day:

The author­i­ties started sub­si­diz­ing newen­ergy au­tomak­ers eight years ago to ex­pand the pro­duc­tion and sales of elec­tric cars, plug-in hy­brids, and fuel-cell cars. The to­tal amount of sub­si­dies that have been pro­vided reached 33.4 bil­lion yuan ($4.81 bil­lion) by the end of 2015. As a re­sult, the coun­try has be­come the world’s largest mar­ket for newen­ergy ve­hi­cles.

For sus­tain­able growth of the in­dus­try, gov­ern­ment sup­port was nec­es­sary in the ini­tial stages, but the man­u­fac­tur­ers of newen­ergy ve­hi­cles must now fo­cus on in­no­va­tion and qual­ity. Thus it is right for the gov­ern­ment to raise the thresh­old for newen­ergy au­tomak­ers to re­ceive sub­si­dies, which are set to be phased out by the end of 2020.

Pro­vid­ing auto com­pa­nies with gen­er­ous sub­si­dies at the ex­pense of tax­pay­ers will likely make them less mo­ti­vated to pro­vide qual­ity prod­ucts, and in some cases it has led to cheat­ing. Seven newen­ergy ve­hi­cle mak­ers have been found to have falsely claimed sub­si­dies for

elec­tric cars that were ei­ther un­fin­ished or in­stalled with sub-par bat­tery cells. With­out doubt, they will be barred from an of­fi­cial cat­a­logue of rec­om­mended ve­hi­cle types that qual­ify for sub­si­dies.

The fact is, the seem­ingly boom­ing newen­ergy ve­hi­cle mar­ket has failed to bring about any ma­jor tech­no­log­i­cal break­throughs. The qual­ity and over­all per­for­mance of Chi­nese newen­ergy cars have not no­tably im­proved ei­ther.

Are­vam­pof the in­dus­try’s sub­sidy pol­icy is there­fore timely. But per­haps the author­i­ties could draw­some in­spi­ra­tion from the bur­geon­ing car-hail­ing mar­ket, where com­pe­ti­tion is ba­si­cally kept at sat­is­fac­tory lev­els. Ser­vice apps sub­si­dized both pas­sen­gers and drivers in the very be­gin­ning, mainly to nur­ture the mar­ket in the early stages. They then cut the sub­si­dies and let the mar­ket take over.

This ap­proach could also work out in the newen­ergy car mar­ket. Less­en­ing re­stric­tions on pur­chas­ing elec­tric cars in big cities should be worth a try.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.