China was planning to end its electric vehicle (EV) subsidy program at the end of 2022, but faced with a slowing economy the country may extend that deadline.
According to three sources that spoke with Reuters, China is in discussions with several automakers to extend the subsidy program for at least one more year into 2023 in order to boost EV sales.
The details around the amount of the subsidies and which EVs would qualify have not finalized. Currently only EVs priced under ¥300,000 and with a driving range of 300km or more qualify for the incentive, which includes the Rear-Wheel Drive Model 3. The Rear-Wheel Drive Model Y used to qualify until a price increase last year pushed it above the threshold.
The subsidy program first began in 2009, and up to the end of 2021 has provided about ¥100 billion ($19 billion CAD) to EV buyers, including commercial fleet operators, according to an estimate by Shi Ji, an auto analyst with China Merchants Bank International. Other estimates have put the amount as high as ¥200 billion.
China originally wanted to end the subsidies in 2020, but decided to extend them by two years to the end of 2022 to support the automobile sector after it experienced a significant drop in sales after the COVID-19 outbreak.