Green-car subsidy to benefit plug-in hybrid vehicles

Shanghai, June 4 (Gasgoo.com) China has recently released the green-car subsidy program designed to boost the nation's auto industry and cut vehicle emissions. Subsidies of up to 60,000 yuan ($8,784) will be given to buyers of all-electric vehicles, and buyers of plug-in hybrid vehicles will receive up to 50,000 yuan in subsidies, Xinhua News reported.

However, in light of difference in battery cost, the plug-in hybrid vehicle (using the hybrid battery) actually enjoys a more favorable financial subsidy granted by the Chinese government, compared to the all-electric vehicle (using the lithium-ion battery).

Battery costs of the plug-in hybrid vehicle and all-electric vehicle will be at least 40,000 yuan and 60,000 yuan respectively, based on preliminary calculations.

Nevertheless, according to the technical specifications for electric vehicles regulated by the Ministry of Industry and Information Technology of China, mileage of the plug-in hybrid vehicle and all-electric vehicle must be more than 70 Km and 100 Km respectively, and the corresponding battery energy should be over 15 Kwh and 25 Kwh. Thus, cost of each type of electrical vehicle will be more than 60,000 yuan and 100,000 yuan accordingly.

Moreover, in the trial period (from 2010 to 2012), the Chinese government will lower the subsidy standards for every automaker after their sales of the plug-in hybrid vehicle and all-electric vehicle both reach 50,000 units, by which the government expects to encourage domestic automakers to lower cost through technology innovation.

It is estimated that sales of the plug-in hybrid vehicle will be much higher than the all-electric vehicle in the early trial period.