Ford EVs In China May Continue To Receive Subsidies

In the U.S., Ford is facing a problem that every EV maker eventually must deal with – the current $7,500 tax credit expires once manufacturers sell 200,000 all-electric vehicles. At the moment, Ford CEO Jim Farley expects that to happen by early next year, though he’s also pushing for expanded or revised EV incentives alongside Bob Holycross, Ford’s vice president of sustainability, environment, and safety engineering. As Ford Authority reported in January, China was previously planning to slash subsidies on new-energy vehicles (NEVs) including electric cars by 30 percent in 2022 before ending them altogether by the end of the year, but now, it seems as if that country is now having second thoughts, according to Reuters.

Chinese officials are reportedly in discussions with automakers to extend these subsidies in an attempt to keep that market growing as the overall economy slows following the implementation of COVID-19 lockdowns back in March. Those lockdowns have affected automotive sales in a major way. As such, officials are considering extending EV subsidies into 2023, rather than letting them expire this year.

Since 2009, China has dished out an estimated 100 billion yuan ($14.8 billion) in EV subsidies, though it’s unclear how a potential extension might work. Officials are reportedly considering rolling back a planned purchase tax increase of 10 percent down to five percent, though there is currently no purchase tax on EVs right now.

This move comes after China decided to allow full foreign ownership of passenger car manufacturing in the country beginning the first of this year. For some time now, Ford has produced vehicles in China in conjunction with Changan Automobile as part of 50:50 joint ventures called Changan Ford – which focuses on Ford’s core vehicle lineup and consumer products – and JMC, which produces commercial vehicles. Regardless, The Blue Oval launched a new joint venture – Jiangling Ford Automobile Technology (Shanghai) Co., Ltd. – earlier this year. The automaker is also now sourcing EV batteries in China from CATL – in addition to BYD – as Ford Authority reported in December.

We’ll have the latest on the status of EV incentives soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.