China has slapped five electric vehicle makers with fines for cheating the government out of about US$150 million in subsidies, Bloomberg reports.
The crackdown follows moves by the government to set higher technological requirements for EV makers and limit the issuance of licenses to manufacture such vehicles.
The government has been providing generous support to the industry to meet its goal of getting five million EVs on the roads by 2020.
However, the subsidies have also attracted companies that were not qualified to produce EVs and interested only in getting the money.
The government last week said it would revoke a production license issued to Gemsea Coach, a Suzhou-based bus maker.
It also ordered the company to pay back all of the 261.6 million yuan (US$39 million) in financial assistance it illegally obtained by submitting fake documents on sales of 1,131 vehicles.
The government is also taking back financial aid from four other companies – Chery Wanda Bus, Shenzhen Wuzhoulong Motors Group, Higer Bus Co. and Shaolin Bus – and asking them to return half the amount of subsidies they received.
Many startups have sought to join the EV boom, including companies backed by Alibaba Group Holding Ltd.’s Jack Ma and Tencent Holdings Ltd.’s Ma Huateng.
Policy makers, on the other hand, have raised concerns that the industry is being plagued by companies that do not have the technology and appeal to compete on the global stage, the report said.
As part of the clampdown, the government is imposing more stringent technology standards and limiting the number of startups in the EV sector to a maximum of 10.
It is also considering adopting a credit system, instead of subsidies, to support the sector.
– Contact us at [email protected]