China will cut subsidies for electric and hybrid vehicles at the end of the year, authorities said, encouraged by solid sales in the sector.

The Ministry of Finance there announced that the subsidies for the purchase will be reduced by 30% from the beginning of the year, and that they will completely disappear at the end of 2022.

“Given the development of the new energy vehicle industry, the tendency to sell and the gradual transition of manufacturers, the subsidies will end on December 31, 2022,” the ministry said.

Vehicles registered after that date will not be subsidized, the ministry added.

Those vehicles should represent 18 percent of total sales in 2022, the Association of Chinese Automobile Manufacturers (CAAM) estimated last week.

In 2019, those vehicles accounted for only five percent of total vehicle sales.

According to the association, 27.5 million vehicles (commercial and for personal use) should be sold this year after 26.1 million in 2021, an increase of 5.4 percent.

For 2021, the total growth of vehicle sales in China should be 3.1 percent, and marks the first year of sales growth since 2018.

E2 portal   (Beta)

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