China is to end subsidies for electric and hybrid vehicles at the end of the year, authorities have announced, saying the strength of sales in the sector meant state support was no longer needed.
Purchase subsidies would be reduced by 30 percent from the beginning of this year before being scrapped completely by the end of the year, the Chinese Ministry of Finance said in a statement on Friday.
“Given the growth of the industry for vehicles with new energy, the sales trends and the smooth transition of manufacturers, the subsidies ... will end on December 31,” the ministry said. “Vehicles registered after December 31, 2022, will not be subsidized.”
Sales of electric and hybrid vehicles have boomed in China, with annual increases of more than 100 percent in the past few months.
The vehicles are set to represent 18 percent of all vehicle sales this year, the China Association of Automobile Manufacturers (CAAM) estimated last week.
In 2019, they accounted for only 5 percent.
Of the 27.5 million vehicles set to be sold this year, 5 million would be electric and hybrids, CAAM said.
Overall growth in the world’s largest market for vehicles would likely come in at 3.1 percent for last year — the first year of sales growth since 2018, the association said.
China, the world’s largest polluter, has set ambitious goals for the widespread adoption of electric and hybrid vehicles, and aims to have the majority of vehicles powered with clean energy by 2035.
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