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Analysis of 2018 national NEV policy

Shiny From Gasgoo| February 23 , 2018

China auto market news, China 2018 NEV policy

Shanghai (Gasgoo)- The 2018 national NEV subsidy policy was announced recently. Here lists five characteristics of the new policy.

1. Transitional period is slightly better than expectation.

According to the new NEV policy, the transitional period is from Feb. 12 to June 11. During the transitional period, new energy passenger vehicles and buses can receive 70% of the subsidies and the new energy specialty vehicles will obtain 40% of the subsidies, while the fuel cell vehicles remains unchanged, based on the 2017 standard. Generally speaking, the output and sales of NEVs will see positive growth during February and June. After the transitional period, the growth of NEV market will not slow down too fast.

2. The new subsidy policy shifts its favor from new energy buses to new energy passenger vehicles.

The new policy optimizes the subsidy standard for new energy passenger vehicles, lowers the standard for new energy buses and specialty vehicles. Besides, the standard for fuel cell vehicles also remains. In addition, the new policy also uplifts the threshold of pure electric passenger vehicles. As required, a new energy vehicle with a range less than 150km is unable to receive subsidies, compared with the minimum range of 100km in 2017. Moreover, the new policy sets the minimum battery energy density at 105Wh/h, compared with 90Wh/kg in 2017. As to the pure electric vehicles with range more than 300km, the subsidy even will see an increase in 2018, which indicates that the new NEV policy will encourage and support the development of new energy passenger vehicles featuring longer range and high quality.

3. Subsidy phasing-out of new energy buses and specialty vehicles meets the expectation.

The subsidies for new energy buses will scale back stably. The new energy buses will suffer 30% YoY drop during the transitional period, and a YoY slump of 40% in the second half of 2018. When it comes to the new energy specialty vehicles, the subsidies will undergo 60% YoY slump during the transitional period and decrease 40% after the policy takes effect. It is expected that the new energy specialty vehicles will post sluggish sales. 

4. The NEV policy lowers mileage requirements, easing the financial pressure for carmakers.

The new NEV policy will not require the lowest running mileage while individual applying the NEV subsidies for the new energy passenger vehicles, official vehicles of party and government and shuttle vehicles at airports. Mileage requirement for other types of vehicles will adjust to 20,000km as opposed to 30,000km in 2017. What's more, government will distribute part of subsidies after the NEVs are sold and registered with license plates. This will help shorten the payment period for carmakers, which will ease the financial pressure for these companiesto some extent.

5. Regional subsidies still exist but only change their focuses.

From 2018, the regional purchasing subsidies for new energy vehicles will gradually support the construction and operating of charging infrastructure as well as the utilization and operation of NEVs. 

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