China’s Ministry of Finance, State Tax Administration and Ministry of Industry and Information Technology (MIIT) have announced that they will extend their New Energy Vehicle (NEV) subsidy program until the end of 2023. The program was scheduled to end at the end of 2022.
The MIIT said the extension was to support the development of the NEV sector and stimulate automobile consumption. Vehicles purchased in 2023 of specifically qualified models will be eligible for the expanded subsidy program, according to an agency statement. An official list should be published soon.
MIIT’s decision marks the third time the NEV grant program has been extended by the Chinese government. The new extension, which will end the program at the end of next year, will cost taxpayers about 100 billion yuan, or more than $14 billion.
China’s electric vehicle market is the largest in the world, just as its overall passenger vehicle market is also the largest in the world. Last year, the country accounted for more than 57% of the total global production of electric vehicles. Even Tesla’s Gigafactory Shanghai accounted for the majority of the automaker’s global deliveries, as it was used as an export hub for the European market while supplying cars to domestic customers.
The growth of China’s electric vehicle market has evidently convinced the government to continue providing subsidies as the country’s focus on sustainable transportation and technology comes to the fore. China could also be widely regarded as the world leader in electric vehicle-related sectors, as it has some of the largest manufacturers and suppliers of electric vehicle batteries in the world. CATL, a China-based company, supplies several of the world’s largest electric vehicle companies with battery cells.
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