China’s Ministry of Finance, State Taxation Administration, and Ministry of Industry and Information Technology (MIIT) announced it will extend its subsidy program for new energy vehicles (NEVs) until the end of 2023. The program was set to be terminated at the end of 2022.
The MIIT said the extension was to support the NEV sector’s development and stimulate automobile consumption. Vehicles purchased in 2023 of specifically-qualified models will qualify for the extended subsidy program, a statement from the agency said. An official list is set to be released soon.
The MIIT’s decision marks the third time the NEV subsidy program has been extended by the Chinese government. The newest extension, which will bring the program to a close at the end of next year, will cost taxpayers roughly 100 billion yuan, or over $14 billion.
The Chinese EV market is the largest globally, just as its overall passenger vehicle market is also the biggest on Earth. Last year, the country accounted for more than 57 percent of the world’s total EV production. Even Tesla’s Gigafactory Shanghai accounted for a majority of the automaker’s global deliveries as it was utilized as an export hub for the European market while also supplying cars for customers domestically.
The growth of the Chinese EV market has obviously convinced the government to continue extending subsidies as the country’s focus on sustainable transportation and technology comes to the forefront. China could widely be considered the global leader in EV-related sectors as well, as it has some of the largest EV battery manufacturers and suppliers in the world. CATL, a company based in China, supplies several of the world’s biggest EV companies with battery cells.
Keyword: China’s electric vehicle subsidy program extended to end of 2023