China to remove subsidies for electric vehicles at the end of 2022

Chinese officials have declared the termination of government financial aid for electric and hybrid automobiles by year’s end, citing robust market performance.

A Friday communiqué from the Ministry of Finance revealed a phased reduction, commencing with a 30% subsidy cut this year, culminating in complete elimination by December 31, 2022.

“Considering the progress of the new energy vehicle sector, market trends, and manufacturers’ seamless transition, financial incentives […] will cease on December 31, 2022“, the ministry stated.

“Registrations after December 31, 2022 will not qualify for subsidies“.

China has witnessed a surge in eco-friendly vehicle sales, with year-over-year growth exceeding 100% in recent periods.

The China Association of Automobile Manufacturers (CAAM) projected these vehicles to comprise 18% of overall sales in 2022.

This figure stood at only 5% in 2019.

CAAM forecasts 27.5 million vehicle sales (commercial and private) this year, up 5.4% from 26.1 million in 2021. Clean vehicles are estimated to account for 5 million units of this total.

CAAM reported 3.1% growth in 2021 for the world’s largest automotive market—the first annual sales increase since 2018.

China, a leading global emitter, aims for a predominantly emission-free vehicle fleet by 2035.