China signals shift in financial support for low carbon vehicles from consumer discounts to R&D
Mon 03 June 2013
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China is to focus more financial backing on the R&D sector, rather than relying on consumer discounts on vehicle purchases. China has not extended national subsidies for electric vehicles which expired at the end of 2012.
China's minister for Science and Technology, Wan Gang, said that government subsidies are only 'short-term solutions' and that industry can only be sustained and expanded by improving technology and cutting costs. technology levels and lowering costs. He said direct government incentives for consumers are likely to be phased out by 2020, if operational expenses can be lowered and the market expanded.
He did not, however, comment on the possible renewal of subsidies on electric vehicles of up to 60,000 yuan ($9,790) , which expired at the end of 2012. At the 2013 International Forum on Electric Vehicle Pilot Cities and Industrial Development in Shanghai Mr Wan said: "The government is unwaveringly committed to the industry, but EV makers should never count on subsidies to survive,"
He added that cars with internal combustion engines are generally less expensive to buy, EVs are a quarter of the price to run, compared with gasoline and diesel counterparts.
Local governments have pledged to support the R&D of key EV technologies. For instance, Guangdong provincial government plans to invest more than 57 billion yuan into 66 key new energy projects between 2015 and 2020. While
By the end of March 2013, China is reported to have had around 39,800 electric vehicles on the road, 80% of which were used for public transport. But Wan urged higher private use of EVs, as the government looks to reduce the country's dependence on fossil fuels.
At the same event, Maria Van der Hoeven, executive director of the International Energy Agency, said that about 160,000 EVs were sold globally last year, just 0.02% of the entire car market.
China's central government is reported to have injected 750 million yuan (US$121.56m) in subsidies to boost low-carbon transport in the past two years.
Triggered by this, the transport sector has attracted about 20 billion yuan in investment for energy conservation and carbon emissions cuts since 2011, the Ministry of Finance is reported as saying by Xinhuanet.
The Chinese government says these efforts have saved energy equivalent to 158,000 tonnes of standard coal and eliminated 699,000 tonnes of carbon emissions annually.
Separate reports (see links) say that China's capital, Beijing, is putting 2000 taxis powered by natural gas on the road. 500 electric taxis have also been introduced to Pinggu District in the city.
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