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Scale and cost to intensify polarization of the NEV industry

Source: China Business News | Date: Nov. 5

  • Since the second half of 2014, China's NEV industry has seen explosive growth. During the first nine months of 2015, China's NEV output reached 156,200 units, nearly three times the figure for the same period of 2014. So far, a number of ministries and departments have launched more than 20 supportive policies for NEVs, involving NEV R&D, production, purchase, use, and supervision.

  • Under the 13th Five-Year Plan for National Economy and Social Development, China will promote new-energy vehicles (NEVs) while enhancing the industrialization of electric vehicles. Insiders believe that the NEV industry will achieve long-term positive growth.

  • According to a notice governing fiscal support policies for the NEV industry from 2016 to 2020, the government will continue offering a subsidy for NEVs until 2020, but the volume will gradually decrease. During 2017-18, the subsidy for NEV models except fuel-cell vehicles will drop by 20% as compared with the 2016 level and by 40% during 2019-20.

  • With the NEV subsidy policy fading away, scale- and cost-oriented marketization will be one of challenges facing NEV manufacturers, one insider says. During the 13th Five-Year Plan period, the NEV industry will see fiercer competition, and disadvantageous companies will be elbowed out of the market.