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NEV makers cope with subsidy cuts by upgrading technologies


Source: jrj.com.cn | Date: Dec. 9

  • The Chinese government has implemented an NEV fiscal policy where government subsidies on pure electric and plug-in hybrid vehicles will be withdrawn in a step-by-step manner.

  • In this light, new energy vehicles with longer driving ranges and higher top speeds are given more subsidies, while inferior ones will face subsidy cuts. This will force carmakers to upgrade their technologies to develop more competitive new energy cars. Carmakers have realized that NEV technologies and quality improvement are the keys to their success in this segment.

  • Apart from quality issues, NEV development has also been impeded by cost problems, which are in the form of high R&D costs, the lack of supply chain integration and economy of scale. Carmakers that lack essential technologies or are unable to integrate supply chains may be driven out of the market.