May 24, 2010 07:03 PM

New Energy Car Subsidies May Reach 60,000 Yuan

(Beijing) - A subsidy plan for individual purchases of new energy vehicles has been drafted by several government agencies, with proposals for subsidies ranging from 3,000 yuan to 60,000 yuan. The plan is set to be released at the end of May.

The subsidy plan, jointly drafted by the National Development and Reform Commission (NDRC), Ministry of Finance, Ministry of Industry and Information Technology (MIIT), Ministry of Science and Technology (MST) and other departments, has been submitted to the central government for review.

Shanghai Securities News cited a source familiar with the situation as saying that the plan set different subsidies for new energy car purchases based on energy conservation capacity and technologies.

Under the plan, hybrid car purchases by individuals could receive up to 3,000 yuan per vehicle. Plug-in hybrid car purchases would receive up to 50,000 yuan in subsidies while purchases of pure electric cars could be subsidized by up to 60,000 yuan.

A plan for subsidies on new energy cars was set to be released in March but has been delayed due to disagreements on whether subsidies should be granted to customers or manufacturers. Li Yizhong, Minister of MIIT, and Vice Minister Miao Wei have both disclosed that the draft plan under consideration targets individual buyers, but subsidy amounts have yet to be settled.

However, Xu Changming, research director with the resource department at the State Information Center, said to Caixin in April that since the technology and market of new energy vehicles are still in the stages of development, subsidies should be granted to manufacturers to enhance quality in manufacturing.

Outside of disagreements on subsidy recipients, different views also exist in the definition of technologies related to new energy vehicles.

On May 15, Li Junfeng, Deputy Director General of the Energy Research Institute under the NDRC, stated at a forum that there still aren’t any new energy vehicles on the market that fit the low-carbon requirement.

Wu Xuebin, general manager at Foton Motor, predicted that pure electric vehicles will need 10 to 15 years to realize a rapid market growth.

Last year, the State Council set a target of 5 percent for new energy cars in China's total auto sales by 2011. However, Wang Binggang, director of the Consultation Group for the Energy-Saving and New Energy Vehicle Project of the MST, said the goal is unlikely to be reached.

According to the development strategy set by the China Automobile Association, by 2015, China's production of pure electric vehicles will reach 500,000. Hybrid cars of all types will account for 30 percent of the total annual auto production and fuel consumption for all vehicles must be reduced by 30 percent.

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