Beijing has cut off municipal subsidies for some electric vehicles as part of a national push to wean new-energy carmakers off government handouts.

Makers of pure electric-battery vehicles will no longer receive subsidies from the city government but will still be eligible for central government subsidies, the Beijing municipal government said Wednesday. Subsidies for battery-powered electric buses, city sanitation vehicles and vehicles purchased by government departments will not be affected by the change, the statement said.

Fuel-cell electric vehicles, which generally run on hydrogen, will still receive both national and municipal subsidies, according to the announcement.

Beijing’s move comes after the central government announced its biggest cuts to subsidies for electric vehicle manufacturers in five years, in what it said were efforts to introduce market competition to the new-energy industry. 

Ending municipal subsidies means “product pricing will become more rational” and will be based on competitiveness and market demand, Lian Qingfeng, an executive at Beijing-based new-energy vehicle giant BAIC, told state-run publication Technology Daily. In April, BAIC predicted a drop in sales of cheaper cars as subsidies dry up. 

Contact reporter Zhao Runhua (runhuazhao@caixin.com)