- Incentives for electric buses said to be cut as much as 49.5%
- Plan is being reviewed by ministries and subject to change
China is proposing to cut the amount of subsidies for electric buses because the policy was considered overly generous, while imposing a price ceiling on passenger vehicles that qualify for incentives, according to people familiar with the matter.
Incentives for electric buses will be cut by an average of 32 percent, with funding for the largest models reduced by as much as 49.5 percent, according to the people, who asked not to be identified as the deliberations are private. Electric passenger vehicles costing more than 350,000 yuan ($53,800) won’t be eligible for government subsidies under the proposal. The plan is still being reviewed by various ministries and has to be approved by the State Council, or cabinet, the people said.
The plan, if approved in its current form, may damp demand electric vehicle sales, which surged more than threefold last year to 331,000 units. China has encouraged consumers to switch from fossil-fuel burning automobiles to emission-free electric cars and gasoline-electric hybrids with the dual aim of mitigating tailpipe pollution and to push its carmakers toward what it sees as the dominant automotive technology of the future.
BYD Co., the Warren Buffett-backed electric car and bus maker, fell 0.7 percent to HK$44.35 as of 9:51 a.m., bucking a 1.4 percent gain in the benchmark Hang Seng Index. Chairman Wang Chuanfu had predicted on Tuesday that the company may boost deliveries of electric vehicles by as much as three times this year in its home market.
Dongfeng Motor Group Co., a Chinese commercial vehicle manufacturer, fell 1.4 percent after reporting full-year profit that missed analyst estimates.
The Ministry of Industry and Information Technology didn’t immediately respond to a faxed request for comment on the plan.
— With assistance by Tian Ying, and Steven Yang