China May Increase Subsidies for Hybrid Vehicles, Minister Says

China, failing to convince motorists to buy electric cars, is considering widening state subsidies for gasoline-electric automobiles and other fuel-efficient vehicles, according to the industry minister.

It is more “realistic and practical” for the government to promote hybrids and other fuel-efficient vehicles than just electric vehicles, Miao Wei, minister for industry and information technology, told reporters at the National People’s Congress in Beijing yesterday. The government will seek to introduce the amended policy in the first half, though the plan needs to be coordinated with the finance ministry and other government branches, he said.

“New-energy vehicles are the future,” said Miao. “Fuel-efficient cars are now.”

Government backing for more types of energy-efficient vehicles may turn into a victory for Toyota Motor Corp., whose Prius is the world’s best-selling hybrid. Miao’s comments add to signs that China, which has forecast cumulative electric-car sales to reach 500,000 by 2015, is recognizing the need to review its policies after deliveries were fewer than 13,000 last year.

“It’s been well accepted that under the current policy, the targets, although modes, will not be met,” said Ashvin Chotai, managing director of Intelligence Automotive Asia in London. “The question is whether they’ll reduce the target or extend the benefit to regular hybrids. I expect they’ll include hybrids and there may be new initiatives that are announced.”

A three-year trial program that ended last year provided subsidies of as much as 60,000 yuan ($9,650) for pure electric vehicles and 50,000 yuan for plug-in hybrids. Regular hybrids only got 3,000 yuan.

While the central government is targeting cumulative sales to reach 5 million by 2020, automakers sold a combined 12,791 such vehicles in 2012, according to Bloomberg New Energy Finance.

— With assistance by Tian Ying

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