China may cut, yet again, subsidies for customers buying electric vehicles (EVs), in what could be another heavy blow to electric car sales in the world’s biggest EV market, which has already seen lower registrations due to previous subsidy cuts.
Chinese car industry regulators are considering a further cut in subsidies, possibly from next year, Bloomberg reported on Friday, citing people with knowledge of the matter.
Discussions over the proposal are in early stages, so it’s uncertain whether China will cut the subsidies again, and even if it does, it’s uncertain that it would do so as of next year, according to Bloomberg’s sources.
China has heavily subsidized EV sales over the past decade, but has started to gradually decrease the subsidies in recent months, attempting to let EV makers compete in the world’s biggest EV market.
However, China’s previous subsidy cut this past June coincided with an economic slowdown, battering sales of EVs on the largest such market in the world.
EV sales in China in July dropped after Beijing cut subsidies and as its economic growth slows amid the U.S.-China trade war. China’s cut in EV subsidies led to global EV sales dropping for the first time on record in July, analysts at Bernstein have estimated. China represents around half of all global EV sales.
Now Chinese policymakers and industry regulators may have to tread carefully on possible further cuts to subsidies, considering that the latest subsidy decrease led to a months-long slump in EV sales.
China’s sales of new energy vehicles (NEVs)—including fully electric and hybrid vehicles—dropped in September for a third consecutive month, by 34.2 percent year on year, according to the China Association of Automobile Manufacturers.
The overall car market is also going through a sales slump—total car sales dropped by 5.2 percent annually in September, extending the annual sales decline for the 15th month in a row.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- The Rig Count Collapse Is Far From Over
- The 10 Highest Paying Jobs In Oil & Gas
- Saudi Arabia Bullies Ultra-Rich Into Buying Aramco Stock
They're trying to discourage the lowest level short range evs.