In the U.S., politicians are currently debating new electric vehicle subsidies to replace the long-running $7,500 tax credit in an effort to speed up EV adoption. At the same time, China is a bit ahead of the rest of the world in that regard. As a result, that country has announced that it will cut alternative energy vehicle subsidies on new-energy vehicles (NEVs) including electric cars by 30 percent in 2022 before ending them altogether by the end of the year, according to Reuters.
Previously, China’s Finance Ministry announced that it intended to cut alternative energy vehicle subsidies by 10 percent in 2020, 20 percent in 2021, and 30 percent in 2022, while public transport subsidies were set to be trimmed by 10 percent in 2021 and 20 percent in 2022. At the same time, China intends to have 20 percent of its total auto sales consist of NEVs – including EVs, plug-in hybrids, and hydrogen cell vehicles – by 2025.
Meanwhile, NEV sales in the country have grown steadily in recent years and are expected to reach 5 million in 2021 – an increase of 47 percent over 2020, according to the China Association of Automobile Manufacturers.
As Ford Authority previously reported, Ford Mustang Mach-E production began in China back in October, with the first deliveries taking place just last week. The Mach-E is manufactured by Changan Ford – a 50:50 joint venture between Changan Automobile and Ford Motor Company – in China for local customers, as opposed to the Ford Cuautitlan Assembly Plant in Mexico, which produces the Mach-E for North America and Europe.
Last week, Chinese officials decided to remove limits on foreign investments in passenger car manufacturing in China, which could have a big impact on the way automakers like Ford build and sell vehicles in that country moving forward. To date, foreign automakers have avoided paying large tariffs imposed on imported vehicles in China by producing those vehicles in the country via joint ventures. However, Ford just announced a new passenger car joint venture with Jiangling Motors last week.