Notice on Improvement of Subsidy Policy for Popularization of NEV Use

In order to support quality development of new energy vehicle industry, as well as popularize new energy vehicle use and promote new energy vehicle consumption, the following policy items are introduced:

Subsidy term is extended, intensity and tempo of subsidy cuts is eased
Due to general technical progress, economy of scale and other factors, subsidy policy for popularization of new energy vehicle use is extended to 2022. In order to ease subsidy cuts’ intensity and tempo, 2020–2022 subsidies will in principle be cut 10%, 20% and 30% compared to the previous year (for 2020 subsidy standards, refer to Annex). In order to speed up electrification of public transport, public buses, coaches, taxis (ride-hailing included), sanitation, urban delivery, postal, airport and governmental vehicles that meet the requirements shall not have subsidies cut in 2020.
2021–2022 subsidies shall be cut by 10% and 20% compared to the previous year. In principle, volume of the subsidized vehicles each year shall not be higher than 2 million vehicles.

Appropriate optimization of technical indices, promotion of strong and optimized industry
In 2020, technical index for battery energy density shall not be changed. Thresholds for new energy vehicle energy consumption and electric vehicle range shall be appropriately raised (for specific technical requirements, refer to Annex). 2021–2022 technical indices shall not be changed in principle. We support development of battery-vehicle separation commercial models. We encourage companies to further upgrade vehicle safety, reliability as well as to research and develop new energy vehicles with advanced operating systems, electronic and electric system architecture and intelligent, connected features.

Improve fund clearing system, increase precision of subsidies
As of 2020, number of passenger and commercial new energy vehicles in a single clearing application shall reach 10,000 and 1,000 respectively. After subsidy policy expires, a final clearing shall be arranged for the companies that did not meet the criteria. Pre-subsidy price of passenger new energy vehicles must be below RMB 300,000 (RMB 300,000 included). In order to encourage development of battery swapping commercial model and expedite popularization of new energy vehicles, battery swap vehicles shall be exempted by this rule.

Adjust the subsidy method, launch fuel cell vehicle demo use
Current fuel cell vehicle purchase subsidy shall be adjusted as to favor cities or areas that have the basis, incentive and special features to launch demonstration projects on development and commercialized use of critical components. Central government shall adopt “reward instead of subsidy” method to award the demonstration cities (relevant notice shall be separately released). We will strive to establish hydrogen energy and fuel cell vehicle industrial chain, and make breakthroughs in core technology, as well as form a favorable environment with rational deployment and synchronized development.

Strengthen fund supervision and ensure funds safety
Local government departments leading popularization of new energy vehicles shall strengthen supervision with other relevant departments and shall simultaneously notify the public on subsidy review results, which shall then receive public scrutiny. Review notices that are not made according to the requirements shall not be accepted. Digital supervision should be used and those with falsified data shall all have their subsidies revoked. Local governments and companies with lax supervision or that participate in subsidy fraud shall be severely dealt with.

Improve supporting policy measures, create a favorable development environment
Based on resource advantages, industrial base and other conditions, draft the new energy vehicle industry development plan, strengthen planning discipline and ensure implementation of the plan. Increase government purchases of new energy vehicles. Except for reasons of special geographical terrain, government shall in principle purchase new energy vehicles and shall give priority to the leasing services with new energy vehicles. We shall push for implementation of policies that ban sales, traffic restrictions on new energy vehicles, and we shall intensify control of diesel trucks and increase advantages of new energy vehicle use. The notice is in effect as of Apr 23rd 2020. Transition period is from Apr 23rd 2020 until July 22nd 2022. During transition period, vehicles that have been registered and meet 2019 technical requirements, but do not meet 2020 technical requirements, shall receive half of 2019 subsidy scheme. Vehicles that have been registered and meet 2020 technical requirements shall receive 2020 scheme subsidies. Price restriction is being implemented upon ending of the transition period.

Original document (Chinese):
http://www.gov.cn/zhengce/zhengceku/2020-04/23/content_5505502.htm

ANNEX