(Yicai Global) June 20 -- China's new energy vehicle production hit a record monthly high in May as carmakers raced to take advantage of the last month of a transitionary period ahead of a new streamlined subsidy regime.
Output at NEV makers more than doubled in May compared with the month before at 14,300 vehicles, representing a near ninefold rise annually, data from Chinese car industry site CVWorld shows.
China no longer grants government subsidies to NEV passenger vehicles with a range of less than 150 kilometers following the introduction of a new industry incentive policy on June 12, which focuses on higher quality models with high energy density and low battery power consumption. The end of subsidies led to a rush among customers to pick up cheaper models, while producers enjoyed one last month of government support for some of their vehicles.
The country has been the biggest market globally for NEVs for the last three years. Sales reached 777,000 vehicles last year, representing just under half of all sales worldwide. The new subsidy regime is part of a government push to encourage automakers and battery manufacturers to upgrade their technology and products to drive the industry forward.
The sector also benefited from a fall in the value-added tax rate in May for passenger cars to 16 percent from 17 percent, which led to some carmakers concentrating efforts on boosting production and sales.
Editor: William Clegg