China, home to some of the world’s most polluted cities, reduced the size of subsidy cuts to electric vehicles for the coming two years and will extend the incentives beyond next year.
Subsidies for this year will be cut by 5 percent, instead of the previously announced 10 percent, and decreased by 10 percent next year, instead of 20 percent, the Chinese Ministry of Finance said in a statement on its Web site on Saturday. The subsidies will continue after the current program expires at the end of next year, it said.
Pressure is mounting for China to contain air pollution which reached record levels in Shanghai last year and prompted cities to impose vehicle quotas. The nation is lagging behind its target to have 5 million alternative energy-powered vehicles by 2020 because of a lack of charging stations and high costs.
The Beijing announced in September last year that it would gradually decrease subsidies as it renewed its current program, which provides as much as 60,000 yuan (US$9,900) toward the purchase of an all-electric passenger vehicle and as much as 500,000 yuan for an electric bus.
To combat air pollution, China’s State Council, or Cabinet, released a national plan that called for a 15 percent to 25 percent reduction in particulate matter by 2017 in the three key manufacturing regions anchored by Beijing, Shanghai and Guangzhou.