China rumored to be extending NEV subsidies into 2023

Tesla China SR Model Y store
Credit: @JayinShanghai /Twitter

The Chinese new energy vehicle (NEV) industry will soon witness a massive change with the imminent expiry of government subsidies at the end of this month. However, there have been reports the Asian country may extend the subsidies into 2023, with a condition.

Government subsidies have been credited for the massive growth NEVs have witnessed in China. However, the subsidies were set to expire at the end of 2022. This means EV buyers will pay more for their cars.

Rumors have it that the subsidies may have been handed a lifeline and may still be offered in 2023, but at half the value of 2022, as reported by CnEVPost.

The subsidy rumor boosted the performance of Chinese EV stocks, showing the importance of the incentives. However, the news has yet to be confirmed, with executives and experts in the Chinese auto industry claim not to be in the know.

NEVs enjoy purchase tax exemptions and other state subsidies in China. The Ministry of Finance initially structured the country’s subsidy to fall by 10, 20, and 30 percent in 2020, 2021, and 2022, respectively.

By 2023, there would be no subsidy by China on NEVs, as the ministry announced a year ago.

There have been rumors that China may extend the subsidies as far back as May. It seems Tesla China is preparing for subsidies to go away as it is reportedly cutting prices by the end of the year.