China to Probe Overcapacity in New-Energy Vehicles

By Xiao Ying and Fran Wang
Government officials say
Government officials say "low-quality, blind expansion" in the new-energy vehicle industry has led to concerns about overcapacity that the government is now studying. Above, a Tesla charging station at the Beijing Huamao Center is seen on May 15. Photo: Visual China

The Chinese authorities have started an investigation into overcapacity in the new-energy vehicle manufacturing sector as entrepreneurs have swarmed into the market to tap lucrative state subsidies, a senior official with the Ministry of Finance (MOF) said.

The government’s strategy to encourage production of new-energy vehicles (NEV)– those powered by fuel sources other than oil – has had some negative impact, Song Qiuling, a deputy director of the ministry’s department for economic construction, said at an event last week to promote a regulation on a planned NEV quota system.

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