China hits pause on electric vehicle subsidy cuts
- Ben Geman, author of Axios Generate
A Tesla Model 3 in Shanghai. Photo: Costfoto / Barcroft Media via Getty Images
China announced it will "not make significant cuts" this year to subsidies on new energy vehicles including electric vehicles, via Reuters, "signaling that its policy will remain relatively stable, state media quoted the country’s industry ministry as saying on Saturday."
Why it matters: EV sales in China, which has the world's largest auto market, dropped sharply after the Chinese government significantly cut industry subsidies in July.
- AP, citing a Chinese trade group, reported that purchases of EVs and hybrids fell nearly 44% in November compared to the prior year.
Driving the news: The Reuters story cites a Ministry of Industry and Information Technology statement plus comments from MIIT's Miao Wei, who told an industry forum there wouldn't be another subsidy cut in July.
Where it stands: "Shares of Chinese electric-vehicle makers including Warren Buffett-backed BYD Co. jumped after the government signaled it won’t continue reducing subsidies for the industry at the same pace this year," Bloomberg reports this morning.
What they're saying: BloombergNEF analyst Colin Mckerracher, on his personal Twitter feed, called the report "big news."
- "I still think EV growth in China this year will be modest, but then pick up again in 2021," he said, citing the government's goal of having EVs and fuel cell vehicles comprise 25% of Chinese sales by 2025.
Go deeper: China's electric vehicle market dwarfs all others