Electric Car Sales Slow Down as Government Updates Subsidy Policy
Yicai Global
/SOURCE : Yicai
Electric Car Sales Slow Down as Government Updates Subsidy Policy

(Yicai Global) Nov. 22 -- The sales growth of new energy vehicles (NEV) in China unexpectedly slowed down in October, while that of commercial new energy vehicles saw a decline. Market insiders believe that the government's suspension and ongoing adjustment of the new energy vehicle subsidy policy may be an important reason for the latest sluggish sales figures.

China Association of Automobile Manufacturers (CAAM) predicted early this year that the sales of NEVs in 2016 would reach 700,000. Yet, Ye Shengji, deputy secretary general of CAAM, recently admitted that sales of 500,000 vehicles may hardly be achieved if the subsidy policy remains to be rolled out.

The stagnant sales data in October is related to an official investigation into subsidy fraud by some new energy car makers, reported China Automotive News, a newspaper under People's Daily. The large number of fraud and cheat cases led the government to adjust subsidy policies. Automakers will not continue to produce such cars before the policy becomes clear, something that has also affected the upstream power battery manufacturers in the industrial chain.

New energy passenger car makers did better than commercial car makers. Sales of passenger cars run at normal levels although new model car sales dropped, GaoLixin, general manager of Chery New Energy Automotive Technology Co Ltd. told China Automotive News.

In October 2016, the output of home new energy vehicles reached 49,000 units, and the sales volume was 44,000, rising by 14.3 percent and 8.1 percent compared to the last year; the growth rate of output and sales slowed significantly during the high season, according to the data from China Association of Automobile Manufacturers.

The output and sales figures provided by China Passenger Car Association portray a grimmer picture. Last October, the sales volume of domestic new energy vehicles was 40,700, down 1 percent month-on-month and 2 percent year-on-year. The sales of commercial pure-electric vehicles were even worse. Compared with the same period last year and last month, the sales of all-electric commercial cars fell by 43 percent and 24 percent; dedicated all-electric vehicles dropped by 75 percent; and plug-in hybrid electric vehicles declined by 43 percent and 29 percent.

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