Inspired by new policy, new energy vehicles on a roll
Sales and production of new energy vehicles in China continued to rise in the first half of this year and are expected to sustain the growth momentum in the second half, analysts say.
The sales of new energy vehicle increased by 111.5 percent year-onyear to 412,000 units in the first half, while production rose by 94.9 percent to 413,000 units, according to data from the China Association of Automobile Manufacturers.
According to Kou Nannan, senior associate with Bloomberg New Energy Finance’s advanced transportation sector, the surge in new energy vehicles during the first half reflects “consumption in advance”, a response to Beijing’s gradual reduction of subsidies.
Kou expects the growth rate to be less drastic in the second half. Manufacturers, especially those producing low-end products, are likely to raise prices to avoid problems due to decline in government subsidies.
“Those making high-end products might maintain their prices, as subsidies for this sector have actually increased this year,” he says.
Headroom for price cuts has been sufficient for certain new energy vehicles, especially e-buses, as well as cost savings through economies of scale and battery technology improvement.
According to a new policy, subsidies for new energy vehicles with a driving range below 150 kilometers stopped as of June 12, while vehicles with a driving range of 150 km to 300 km will receive minimal subsidies.
Battery power/weight requirements for receiving subsidies have been increased from 90 watt-hours/ kilogram to 105 whr/kg, according to the new policy released by the Ministry of Finance.
Authorities have said subsidies for new energy vehicles will be reduced in phases from 2017 to 2020, with tighter technical requirements.
Industry insiders say the subsidy cut, which is meant to aid the industry’s