China to detail new-energy auto support policy

Shanghai, May 11 (Gasgoo.com) As a follow-up to the auto sector restructuring and boost plans it launched earlier this year, the China government is set to specify in June the details of its related support policy to boost the purchase of new-energy vehicles, said sina.com today.

Currently, technological sophistication and cost control are two major bottlenecks for the speed-up of China's new-energy vehicle commercialization and therefore will be what the government's forthcoming support policy will focus on. The market and the OE facilities are also the challenges for the new-energy vehicle sector's growth.

Over the past few months, China has promised to earmark multi-billion yuan for developing and upgrading the country's new-energy auto technology, to trial-run thousands of new-energy vehicles in more than ten cities, and to subsidize the purchase of new-energy cars. These plans are expected to boost the market demand, but it remains to be seen whether they can be implemented thoroughly.

Chinese carmakers are required by the government to produce 500,000 new-energy vehicles annually by 2011, when the sales of new-energy cars are to account for 5% of the total sales of passenger vehicles in the Chinese market. The fulfillment of these goals will depend largely on the market, cost control, technology, among other factors.

China's auto industry is also facing energy, environmental and financial challenges, which make it urgent to develop alternative energy vehicles. The government started on January 20 to cut the purchase tax on low-emission cars and promote sales of new-energy vehicles, which stimulated auto sales in the first four months.