China's electric vehicle industry faces new challenges
China’s electric vehicle industry is experiencing a wave of hardship this week as trade-in subsidies from many major cities have been suspended, hitting retail sales hard and dimming hopes of a recovery in the nascent EV market.
Consumer subsidies stagnate in major cities
At least six major cities, including Zhengzhou, Luyang, Shenyang, Chongqing and Xinjiang, have temporarily suspended their car-change subsidy programs as funds have run out, according to official statements. China’s retail market showed signs of recovery, rising 6.4% in May, largely due to these support policies.
Current research worries that delaying subsidies could sharply reduce consumer demand, while also affecting business confidence in the third quarter.
Subsidy restrictions make it difficult for electric vehicle manufacturers
Electric vehicle makers in China are facing a new challenge as local governments freeze key subsidies, citing reasons ranging from central funds running out to adjustments aimed at improving investment efficiency.
The targeted national subsidy program, which encourages consumers to trade in old cars for new models, is a pillar of Beijing’s consumption promotion strategy. By the end of May, more than 4 million applications for the trade-in subsidy had been submitted.
Anti-fraud of “clockless cars” needs to be strengthened
Despite the program’s popularity, there have been issues with enforcement and abuse. Businesses have exploited loopholes in the policy to sell new or nearly new cars as used cars to profit from state funds.
In response to the backlash from the media and regulators, the government has stepped up its oversight and called on automakers to immediately end sales strategies based on abuse of these subsidy programs. Major players such as BYD and Nio have had to adjust their prices, raising concerns about the industry’s long-term profitability.
Although there is no clear plan for additional funding, authorities have insisted that the subsidy program will continue through 2025, with the expectation that central cash will be replenished as early as July.
Source: https://tintucbitcoin.com/xe-dien-trung-quoc-khung-hoang-tro-cap/
Thank you for reading this article!
Please Like, Comment and Follow TinTucBitcoin to stay updated with the latest news about the cryptocurrency market and not miss any important information!
