BYD’s subsidiary receives RMB1.342 bln of governmental subsidy on NEV sales

Shanghai (Gasgoo)- BYD announced on March 2 its subsidiary BYD Auto Industry Co.,Ltd scored RMB1,342,260,000 of central government subsidy for new energy vehicle promotion that occurred in 2017.

The latest money should be a part of NEV subsidies announced by China's Ministry of Industry and Information Technology in last October. According to the governmental file issued then, BYD and its four subsidiaries, including the foregoing BYD Auto Industry Co.,Ltd, were entitled to RMB3,158,720,000 of NEV subsidy.

（Photo source: BYD)

The Shenzhen-based automaker said the newly-received subsidy will help BYD improve its cash flow, speed up the turnover of receivables, and decrease the financial expenditure and debt-to-assets ratio.

As a leading NEV manufacturer in China, BYD has been posting downturn in NEV sales for seven consecutive months. Part of the blames should be laid on the phase-out of NEV subsidy effective on June 25, 2019. In accordance with a policy issued in last March, local governments were requested to annul subsidies on purchases of new energy cars after a three-month grace period.

On the heels of BYD's announcement, Dongfeng Automobile Co., Ltd. (DFAC) also confirmed its receipt of RMB200 million worth of state subsidy on NEV sales. Based in Wuhan, the hardest-hit region during the novel coronavirus epidemic, the automaker output and sold 12,715 and 11,528 new vehicles in Jan., sliding 9.38% and 8.48% year on year respectively. However, the PV sector suffered huge plunge with only two units sold and zero produced.