New energy vehicle subsidies need to continue but can be more efficient

Encouraging the development of new energy vehicles is a trend. Subsidy policies also need to continue. The purpose of the adjustment of the subsidy policy is actually to allow consumers to use the new energy vehicles with higher technology and quality at moderate prices.

In recent days, news about the further tightening of subsidies for new energy vehicles has attracted much attention. Some media reports said that the relevant parties are studying and adjusting the 2018 central government subsidy policy and are inclined to encourage high mileage and low energy consumption models. The subsidy for new energy vehicles with a range of 150 kilometers or less will be very low, and the subsidy for new energy buses and special vehicles will be significantly reduced. At the same time, there are also reports that local subsidies for new energy vehicles are being cancelled.

Although there are some differences in news, but from the news from various parties in recent days, the public opinion is more recognized: that is, to further adjust the subsidy policy, the need to further subdivide the original basis, and strengthen the subsidies for advanced technology and products. Subsidies should be more inclined to products with high energy density.

As we all know, subsidies for new energy vehicles are divided into two parts: central government subsidies and local government subsidies. In 2010, the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, and the National Development and Reform Commission jointly issued the Interim Measures for the Administration of Privately-purchased Pilot Financial Assistance Funds for New Energy Vehicles, requiring local governments to provide support for charging infrastructure, purchase of new energy vehicles, and battery repurchases. It is undeniable that it is precisely because of the strong support of the central government's financial subsidies that the domestic new energy vehicle inventory has grown rapidly, and the entire industry has also seen rapid development.

The subsidy policy for new energy vehicles needs to be adjusted. First, unexpected "cheat incidents" occurred in some places. The Ministry of Finance announced in 2016 that only 5 companies including Suzhou Jimsi and Suzhou Jinlong have been able to make up more than 1 billion yuan. At the end of 2016, four ministries and commissions such as the Ministry of Industry and Information Technology issued a subsidy adjustment plan for new energy vehicles. The scheme requires local subsidies to not exceed 50% of the central government's subsidy for bicycles. Subsequently, local standards for subsidy have been clarified in various places. Among them, Beijing and Tianjin have 50% subsidy in the private sector according to the national standard.

"Subsidy" does not exceed 50% of the central subsidy, and it clearly reveals the signal of policy adjustment. Before the adjustment, taking a 6-8m pure electric minibus as an example, the national subsidy standard is 300,000 yuan per vehicle. In many places, the subsidy is 1:1, then a subsidy for a car can get 600,000 yuan. yuan. Such a high subsidy has caused many car companies to covet. Some companies that lack technology content have found that it is more profitable to “cheat up” than to improve processes and reduce energy consumption.

Second, after the new energy vehicle subsidy policy is implemented for several years, it needs to develop to a higher stage. It needs to fully consider the role of promoting industrial development, improving quality and efficiency, and improving the efficiency of subsidy policies in terms of technological progress and industrial guidance. In recent years, in fact, many companies have launched a large number of low-end new energy vehicles. Their technical content is not high, but they rely on subsidies to live well. The subsidies in the future should be more representative of the support of high-quality enterprises and advanced technologies, and it is not appropriate to give opportunities to those who abuse others.

It can be expected that after subsidies are adjusted, there will be cases where the outdated production capacity of new energy vehicles will be eliminated, and some enterprises will lose their profits due to losing competition. Some companies that rely on financial “blood transfusions” to become famous brands may even disappear from the market. In any case, the healthy and sustainable development of new energy vehicles still depends on full market development and fair market competition; and subsidies that are more efficient will be more in line with market trends. Encouraging the development of new energy vehicles is a trend. Subsidy policies also need to continue. The purpose of the adjustment of the subsidy policy is actually to allow consumers to use technology and higher quality new energy vehicles at moderate prices.

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