China will remove subsidies for electric and hybrid vehicles at the end of the year, authorities said, reassured by firm sales in the sector.
In a statement released on Friday, the Ministry of Finance announced that these purchase subsidies would be reduced by 30% from the start of the year, before disappearing entirely at the end of 2022.
“In view of the development of the new energy vehicle industry, the sales trend and the smooth transition of manufacturers, the subsidies […] will end on December 31, 2022“, the ministry said.
“Vehicles registered after December 31, 2022 will not be subsidized“.
Sales of clean vehicles have exploded in China, with increases of more than 100% seen in recent months over a year.
These vehicles are expected to account for 18% of total sales in 2022, the China Association of Automobile Manufacturers (CAAM) estimated last week.
In 2019, these vehicles represented only 5% of the total.
According to CAAM, 27.5 million vehicles (commercial or private) should be sold this year, after 26.1 million in 2021, an increase of 5.4%. Clean vehicles would represent 5 million units of this total.
In 2021, the total growth of the world’s largest market should stand at 3.1% according to CAAM, the first year of sales growth since 2018.
China, the world’s main polluter, is targeting a fleet of vehicles in 2035 consisting mainly of so-called non-polluting vehicles.