Subsidies for purchasing electric vehicles in China are cut by another 30% in 2022, four Chinese central ministries announced on Dec. 31. The policy document also confirmed 2022 will be the last year of government-paid EV subsidies, which have been in place in China since 2010.
The decade-long subsidy policy has helped several prominent Chinese EV companies, such as NIO and XPeng, grow quickly, giving China a new opportunity to contend in the global auto market. But the plan to phase these subsidies has also been cooking for years. Instead of direct subsidies, China has turned to a market-based approach, first launched in 2017, that asks automakers to trade "New Energy Vehicle" credits.
The 30% reduction in subsidies this year can translate to an EV price increase in the thousands of RMB. For example, purchasing an EV with a driving range longer than 400 kilometers (248 miles) may now be 5,400 RMB ($850) more expensive, which drove some customers to place their orders before the new year, according to Chinese tech publication DoNews.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE