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NEV subsidies likely to decrease ahead of schedule in May

Nancy From Gasgoo| January 15 , 2018

China auto market news, China NEV subsidy policy

Shanghai (Gasgoo)- It is rumored that the reduction of NEV subsidies will be implemented ahead of schedule. The reduction program of NEV subsidy will reportedly be published by the end of January and will take effect on May 1. According to a worker from auto industry, the subsidy reduction ahead of schedule will get many aspects involved. A transitional period may be provided for the carmakers to adapt and make preparations for the coming subsidy reduction. During the transitional period, government will offer special NEV subsidies, which will be discounted compared with the subsidies in 2017.

According to Wang Pan, vice president of sales from Shenzhen BAK Battery Co., Ltd., the product inventory and cash flow of power battery manufacturers will be impacted by the policy adjustment. If the subsidy reduction was scaled back ahead of schedule, it may pose great pressure for the power battery industry. Zhong Mengguang, vice CEO of OptimumNano Energy Co., Ltd. believed that the reduction program of NEV subsidies signals that battery companies should pay more emphasis on technology R&D and development, or they will be weeded out through the increasingly intense competition.

The leading power battery companies had invested heavily on technology R&D. With this program for scale-back of NEV subsidies, they will enhance their efforts on technology R&D, so that they could maintain their leadership in industry. In accordance with the program, policy will give favor to the leading companies, while it will stimulate the companies which are much dependant on the subsidies to seek technological breakthroughs. 

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