Shanghai ends licence perk for cheap electric cars
The Shanghai city government is about to stop issuing free licence plates to buyers of electric vehicles, according to dealers and local media, a move that could more than quadruple the price of getting a small battery-powered car on the road.
The policy change, expected to be announced in the coming weeks, could dent demand for some of the bestselling electric vehicles such as the Hongguang Mini EV and Ora-branded cars.
“Shanghai is a pioneer among mainland cities to promote use of electric vehicles, and it is a key battleground for all carmakers,” said Gao Shen, an independent analyst of Shanghai’s manufacturing sectors.
“Mini electric vehicle manufacturers will suffer a setback from the policy change.”
According to three managers with local car dealerships, the municipal government has suspended granting free licence plates for electric cars priced below 100,000 yuan (HK$120,700).
Local state-owned media said the mainland’s commercial capital would publish an official document about adjustments in electric-vehicle-related incentives in the coming weeks.
Shanghai began giving buyers of pure-electric and plug-in hybrid cars a free licence plate in 2018 to encourage the use of green vehicles.
It is a huge incentive. A car number plate can cost almost 100,000 yuan in Shanghai – more than three times the cost of the Hongguang Mini EV, the bestselling electric car in China.
That means a motorist spending 28,800 yuan on the vehicle itself could end up paying well over four times that to get the car licensed and ready to drive.
The Hongguang Mini EV, assembled by GM’s three-way venture, SAIC-GM-Wuling, has been outselling the American giant Tesla by almost two to one, with monthly deliveries of about 40,000 units. Tesla sells Model 3s and Model Ys made in Shanghai.
Sales of Great Wall Motor’s Ora brand of electric cars, which are about 20,000 yuan more expensive than the Hongguang Mini EV but have longer mileage, are also bound to be affected by the scrapping of free number plates.
To ease its gridlocked roads, Shanghai began charging owners of traditional cars for a licence plate in the 1990s. Motorists are required to take part in a public bidding system to buy a licence plate before their cars are allowed on the streets.
Last year, 125,460 electric and plug-in hybrid cars were sold in Shanghai, accounting for 10.7 per cent of the national total.
But surging electric vehicle sales have piled pressure on the city’s transport authorities to limit the number of new cars.
China, the world’s largest electric car market, is likely to see sales of 6.6 million battery-powered or hybrid vehicles in 2025, nearly five times last year’s total, according to a forecast by Swiss bank UBS.