When subsidies for "weaning," will officially open a new energy vehicle race

After a wave of fraud in the new energy vehicle (NEV) subsidy system, the policy was revised to address these issues and restore credibility. As the eligibility criteria became stricter, by 2016, nearly half of all NEVs failed to meet the subsidy requirements. Many vehicles were still being driven well beyond the required mileage, with some covering over 30,000 kilometers in what could be described as "long marathons." Recently, the Ministry of Industry and Information Technology conducted an expert review of the second batch of supplementary settlement applications for 2016, resulting in the "First Review Report on Supplementary Liquidation Audit of New Energy Vehicles for the Promotion and Application of the Second Batch of 2016." According to Cui Dongshu, secretary general of the National Passenger Vehicle Market Information Association, the number of subsidies approved for NEVs in 2016 is now less than half of the total production and sales for that year. He attributes this to the strict "30,000-kilometer" requirement, which he argues is not only unrealistic but also detrimental to the development of passenger NEVs. This outdated standard, he says, needs to be re-evaluated. In 2016, a total of 517,000 NEVs were produced, and 507,000 were sold. However, only 238,000 applications for subsidies were submitted, with 228,000 approved. The total funding requested was 29.6 billion yuan, and 28.8 billion yuan was approved. Of that, 21.5 billion yuan went to passenger cars, while 7.17 billion yuan was allocated for commercial vehicles. Major recipients included Yutong (6.5 billion yuan), Zhongtong (3 billion yuan), and BYD (2.7 billion yuan). For passenger cars, the top three subsidy recipients were BYD (3.12 billion yuan), BAIC New Energy (850 million yuan), and Geely (750 million yuan). Currently, the subsidy for new energy buses in 2016 was three times that of new energy passenger cars. For instance, Yutong received a subsidy of nearly 6.5 billion yuan for 18,000 buses, which was close to the total subsidy for all passenger cars. Even BYD, which topped global sales with 100,000 NEVs sold in 2016, received a much smaller subsidy—only 5,574 buses were subsidized, totaling less than Yutong’s. Similarly, BAIC sold over 50,000 NEVs, but only 18,000 received subsidies, likely due to the 30,000-kilometer rule. To get the NEV industry back on track, the delayed "New Deal" introduced on December 30, 2016, aimed to tackle fraud by requiring non-individual users to apply for subsidies, with a minimum cumulative mileage of 300,000 kilometers. This move signals a shift toward more stringent and realistic oversight, aiming to ensure that subsidies are used effectively and fairly.

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