19 provinces and cities have introduced local subsidies for new energy vehicles

Since 2016, the subsidy policy for new energy vehicles at the national level has been continuously adjusted and continuously retreated, and local subsidy must not exceed 50% of state subsidies. In order to prevent the use of subsidy policies and create a fair buying environment for consumers, some car companies in 2018 have begun to try a unified national price strategy. Then, in the first half of 2018, which cities have issued landfill policies? What changes have taken place in the landfill policy? Which car companies have implemented the national unified price strategy?

30 seconds to read the full text:

1. Local subsidies are a “double-edged sword”, which increases the market competitiveness of new energy vehicles and at the same time cuts the market for new energy vehicles.

2. Local subsidies are being changed from subsidized models to encourage companies to research and development, encourage large-scale sales, and encourage model announcements;

3, in order not to make up for the clamp, to create a fair buying environment for consumers, some car companies have begun to try a unified national pricing strategy.

There are 20 provinces and cities in the country that have issued supplementary compensation policies

According to incomplete statistics, there are currently 5 provinces and 14 cities in the country that have introduced local subsidy policies for new energy vehicles. Most regions maintain a 1:0.5 ratio with state subsidies, and individual cities are less than this amount. In addition, Henan Province and Putian City began to subsidize sales in accordance with the scale of sales, both of which are based on the sales of 1,000 units of a single vehicle model. After reaching the standard, a certain amount of financial subsidies can be obtained.

It is worth noting that Beijing, which is the key city for the promotion of new energy vehicles in the country, did not appear in the list of cities that have issued the above-mentioned compensation policies. In 2016 and 2017, Beijing issued the subsidy policies in the first half of the year. On February 27, 2018, Beijing Municipality promulgated the “Administrative Measures for the Promotion and Application of New Energy Vehicles in Beijing”, stating that Beijing encourages the purchase and use of new energy vehicles. The relevant financial subsidy policies will be studied and formulated separately.

Behind the delayed issuance of Beijing's subsidy policy is the controversy over the retention of the nation's subsidy policy. As early as December 15, 2017, Lu Huaping, Assistant Secretary-General of the National Passenger Car Market Information Association, publicly disclosed at the meeting that in 2018 Beijing may take the lead in cancelling local subsidy policies. Informed sources also disclosed that at the national level, there have been discussions on the cancellation of local subsidy for new energy vehicles. In order to ensure the openness and transparency of the new energy vehicle market, some industry experts have suggested canceling local subsidies. Beijing, as a vane for the promotion of new energy vehicles in the country, once discussed the cancellation of subsidies for new energy vehicles and once had to start from Beijing. After several rounds of competition, Beijing’s local policy still tends to remain in 2018, and it will be conducted in accordance with the state subsidy quota of 50%.

Local subsidies are a "double-edged sword"

New energy vehicle subsidies are divided into two parts: state financial subsidies and local government subsidies. In 2010, the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, and the National Development and Reform Commission jointly issued the Interim Measures for the Administration of Privately-purchased Pilot Financial Aid Funds for New Energy Vehicles, requiring local governments to support the purchase of new energy vehicles. From 2010 to 2016, the amount of local subsidies is not limited, and it can be arranged according to the actual situation in the country. The demonstration and promotion of new energy vehicles by local governments is based on a subsidy of 1:1 with the central government. At the end of 2016, the subsidy policy was adjusted to require that the local subsidy amount should not exceed 50% of the central subsidy.

The original intention of setting up local subsidies is to cooperate with state subsidies to increase the market competitiveness of new energy vehicles for fuel vehicles. However, in the actual implementation process, there has been a controversial "local protection" phenomenon. In order to protect local enterprises, local governments usually set a number of thresholds to restrict the entry of foreign companies, for example, requiring them to set up companies in the local area, supporting local core components and so on. This splits the market for new energy vehicles. The same new energy vehicle products have different sales prices in different places due to local differences, which is not conducive to creating a fair consumption environment for consumers.

It can be seen that the policy of subsidy for new energy vehicles is a “double-edged sword”, which increases the market competitiveness of new energy vehicles and at the same time interferes with fair market competition to a certain extent.