- In March 2022, MIIT and Ministry of Finance announced the volume of subsidies settled for 2019-2020. In total, the number of approved NEVs eligible for subsidy reached more than 250,000 in 2019 and more than 590,000 in 2020. The total approved subsidy amount summed up to 8.9 billion CNY in 2019 and 10.6 billion CNY in 2020.
- Among OEMs who produce mainly sedans, BYD was the biggest subsidy receiver in 2019 (1,3bn CNY) and enjoyed the highest subsidy per vehicle. In 2020, Tesla is the biggest subsidy receiver (2,1bn CNY) and enjoyed the second-highest subsidy per vehicle.
- The average subsidy per vehicle of the three selected German and Japanese JVs is 8.6k CNY in 2019 and 7.4k CNY in 2020 respectively. Domestic entities and Tesla received higher levels of subsidies per vehicle than the JVs, since the JVs on average have a larger proportion of PHEV in their NEV mix than their domestic peers and Tesla.
- The NEV subsidy scheme, which has lasted for 12 years, will be phased out after the end of 2022. In 2022 the unit subsidy will be further cut by 30% from the 2021 level. According to the new technical requirements, the average subsidy per vehicle will be 9.1k CNY if the e-range of the NEV is between 300 km and 400 km, and 12.6k CNY if the e-range is over 400 km.
- EV OEMs are adopting different pricing strategies in response to the subsidy cuts: Tesla increased the price of Model 3 by 10k CNY and that of Model Y by 21k CNY in Jan 2022 in order to make up for the loss of subsidy. In contrast, some Chinese OEMs such as Xiaopeng decided to provide subsidy to customers themselves in order to keep the price unchanged in the short term.
Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.