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China Will Phase Out EV Subsidies, Shift Toward Funding Tech R&D

Originally published on EV Obsession.

Following widespread reports of possible electric vehicle subsidy fraud in the country, the Chinese Finance Ministry announced back in January that it would not be extending electric vehicle subsidies beyond 2021. And that it also would begin slowly phasing them out with a 20% cut over the next 2 years, and a 40% cut between 2019 and 2020.

During a recent State Council meeting in the country, Premier Li Keqiang revealed his plan for the funding that would otherwise be going towards electric vehicle (EV) subsidies to be shifted towards technological research and development, and sales target incentives.

bmw-i3-china

In particular, the country’s policy-makers seem keen to support battery research and development — an area where the country is already a major player, but could potentially capture a much larger market share.

Green Car Reports provides more:

Chinese officials have long dreamed of the country becoming a leader in electric-car technology. And China has a natural advantage in its large deposits of rare earth metals, which are used in battery cells. But China’s domestic car industry isn’t as advanced as those of other countries; most large Chinese carmakers still operate under partnerships with foreign firms. Potentially helping the domestic industry is a proposal to encourage “public institutions” and transit fleets to adopt electric vehicles.

The speech from Premier Li also included a proposal to raise the public-institution fleet electric vehicle mandate to 50%, up from 30%. Such a move would of course, even just on its own, notably increase electric vehicle demand, given the enormous size and population of the country.

Reprinted with permission.

 
 
 
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Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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