(CBN - Global) May 5 -- China's publicly listed new energy bus makers received subsidies last year that exceeded their annual net profits many times over, with some seeing payments equivalent to dozens of times their earnings.
Anhui Ankai Automobile Co. [SHE:000868] had net income of CNY40.24 million (USD6.2 million) in 2015, while its new energy vehicle subsidy amounted to CNY1.28 billion, almost 34 times its profit. SG Automotive Group Co. [SHA:600303] produced just 46 new energy vehicles in 2014, but last year it ramped up output and sales by more than 40-fold to 1,878 and 1,880 respectively. Its annual financial statement showed that its subsidy accounted for almost 47 percent of revenue.
At the beginning of this year the government investigated suspected 'fraudulent subsidies,' and rumors swirled in the market about the possible revision of national standards for subsidies. However, details of how these regulations for local subsidies would be implemented have yet to be announced.
Uncertainty about the subsidy policy and delays in the payment of national and local subsidies in 2015 have caused first-quarter output and sales of new energy vehicles to fall compared with the previous three months, leaving passenger bus makers in a bind.