Shanghai (ZXZC)- A total of RMB31.3 billion will be earmarked next year as New Energy Vehicle subsidies of 2017 and 2018, according to a filing from China’s Ministry of Finance. RMB16 billion (US$2.28 billion) is for the promotion and application of NEV (new energy vehicle) in 2017. In 2018, the subsidy for energy-saving and new energy buses’ operation totals RMB 15.3 billion (US$2.18 billion).

In 2018, the subsidies for all-electric buses and FCV (fuel cell vehicle) are RMB13 billion (US$1.85 billion) and RMB2.42 million (US$344 thousand) respectively. The PHEVs (plug-in hybrid electric vehicle, including the range-extended ones) is offered a subsidy of RMB2.3 billion (US$327 million), while the fund for HEVs amounts to RMB260 thousand (US$37 thousand).

The subsidy will be allocated to 37 regions in China. Thanks to Zhengzhou Yutong Group’s large market shares in the field of electric buses, Henan province will receive the most fund of RMB5.46 billion (US$777 million). Hunan and Shandong are ranked second and third with subsidy reaching RMB2.9 billion (US$413 million) and RMB2.8 billion (US$398 million) respectively.       

With the help of the substantial subsidy provided during the past several years, China has become one of fastest-growing NEV markets in the world. In 2018, the country's NEV sales surged 61.74% to around 1.256 million units, according to the China Association of Automobile Manufacturers (CAAM).

To strengthen the regulation and monitoring, the government stipulates that NEVs not for personal use must meet the requirement of 20,000-km range. 

Meanwhile, the country’s subsidy for NEV has been phasing out and is supposed to be stopped at the end of 2020. The funds will be used to construct infrastructures, such as charging and hydrogen refueling facilities. In the future, NEV automakers will mainly follow the dual credit policy (photo source: Yutong).