After 10 years of development, China’s new energy veh

cles are starting to gain momentum in the private market. With the overall vehicle market remaini

ng flat, sales of new energy vehicles last year reached 1.25 million, up 61.7 percent year-on-year, and

the figure is expected to reach 1.6 million this year according to the China Association of Automobile Manufacturers.

China plans to stop subsidies on new energy cars by the end of 2020. To ensure a smooth transi

tion, the government decides to achieve this goal by enacting policy in several phases. This year’s subs

idy standard was slashed 50 percent on average from 2018, Xinhua reported, citing a person with knowledge of the matter.

The source said the proportion cut is basically consistent with falling ratios of general cost for co

mplete vehicles, while pointing out with the rapid expansion of the NEV industry some enterprises tend

ed to become reliant on long-standing subsidies, leading to weak competitiveness.

The statement also asked local governments to remove subsidies on purchases o

f new energy cars after a three-month grace period starting Tuesday. Instead, more funds will be used

to build infrastructure, including charging and hydrogen refueling facilities, and to facilitate relevant services.

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