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Published on September 4th, 2014 | by Christopher DeMorro


Chinese Automakers Get More EV Incentives

September 4th, 2014 by  

tesla-model-s-in-china (1)

As was predicted, the Chinese government has made a big push to get drivers into electric vehicles. Cities like Beijing and Shenzhen are eliminating costly taxes on electric cars and installing EV charging stations at many public places, and these benefit both foreign and domestically-made electric cars.

But as Reuters reports, China is also making a push to protect its homemade auto industry with a new wave of EV incentives on 17 approved (mostly Chinese) models. This includes vehicles built by joint ventures between Chinese auto manufacturers and companies like Daimler, Nissan, and GM, and can help curb the often-heavy tax burden that many new cars are levied with.

Last month China also announced that all “new energy” vehicles would be exempt from the 10% national sales tax, which goes hand-in-hand with local and national incentives. For example in Beijing, EV and PHEV buyers can get over $9,700 off the cost of their car. These buyers are also exempt from the costly license plate lottery, which was instituted to stem the tide of new cars flooding China’s roads.

This latest round of EV incentives is especially beneficial for foreign companies that have invested in joint ventures in China. For example, the Denza EV is the work of the combined efforts of Daimler and BYD, and thanks to these and other benefits, the $59,000 Denza should see its price slashed to below $40,000 (or less!) when all is said and done.

Unfortunately companies like Tesla and BMW, which sell in China but haven’t developed joint ventures with domestic automakers, will miss out on these new incentives. While the 10% sales tax exemption applies to all EVs, regardless of where they’re built, those extra incentives could convince buyers to give their money to local brands instead of foreign entities. In a market that could easily see 20 million new cars sold per year in the coming decade, that could add up to a lot of lost incentives…and sales.

Perhaps that is why Elon Musk was so hot on the idea of eventually building a Tesla factory in China?

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About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.

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