Gasgoo.com (Shanghai, April 12th) – The government in Shanghai of China announces to cut down subsidies on buying alternative energy vehicles from RMB30, 000 yuan to RMB10, OOO yuan, which will be launched from April this year.
Reducing government subsidies aims at encouraging automotive companies in China to focus on market force for promoting alternative energy vehicles. And the government will no longer give any subsidy by 2020. Chinese carmakers will get rewards from the government instead if they can make breakthrough on developing power batteries and increasing the market shares of alternative energy vehicles.
With government subsidies cut down, the sales of some models, like Qin of BYD, have suffered a decrease. Different from buyers of Roewe, that of Qin can not get the extra subsidies of RMB14,000 yuan due to the fuel consumption of Qin, leading to rise in price. It is said that about 30% of orders have been cancelled. The sales of Tang, another alternative energy model of BYD, remain stable at present, thanks to the lack of direct competition in China’s market.
For good-selling models, like Roewe, increasing production capacity turns out to be the biggest challenge they face. Buyers can not get their vehicles until at least three months later. Moreover, applying for a license plate of an alternative energy vehicle for free in Shanghai will not succeed unless owners can prove that they have charging conditions.
However, the construction of charging stations and the development of charging facilities still remain to be improved in China, slowing down increasing the market shares of alternative energy vehicles. On the other hand, constant complaints about power batteries being out of work from buyers also hamper the growth of alternative energy vehicles in China.
Government subsidies and other supporting policies can help to improve the market shares of alternative energy vehicles in a short time. However, in the long run, only by further improving the product itself and even the whole system can alternative energy vehicle become the best choice of customers in China.
