China is considering a further reduction in electric-vehicle subsidies next year, Bloomberg reports, citing sources familiar with the matter.
The government wants to scale back subsidies as it wants automakers to rely more on innovation and technological improvement, rather than fiscal policy, to spur demand, according to the report.
The average purchase incentive per electric vehicle may be lowered by more than a third from the 2018 levels, sources were quoted as saying.
Vehicles may be required to be able to go at least 200 kilometers on a single charge to be eligible for incentives, up from 150 kilometers currently.
The plan is still under discussion and subject to changes, the report said.
As part of new rules that went into effect on Feb. 12, China lowered subsidies by varying degrees for EVs with a driving range of less than 300 kilometers.
Subsidies had been key to making plug-in hybrids and EVs of companies such as BYD more affordable to Chinese consumers.
The central government spent 6.64 billion yuan last year funding consumers’ purchases of such vehicles, the report noted.
On top of what the central government spends, Chinese cities and provinces offer incentives on their own for alternative-energy vehicles.
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