China boosts subsidies for longer-range electric cars while raising benchmark for elegibility

China is taking sincere steps towards green car by boosting electric vehicle productions and sale.  While the government is increasing subsidy on EVs they are also making sure that automakers are encouraged and compelled to make EVs with higher range on a single charge so that more and more people can afford EVs and substitute gas fuel cars with them.

Under the new subsidy rules, which took effect Monday 12 Feb, China is increasing subsidies for electric vehicles that can travel with a range of 400 kilometers (249 miles) and more on a single charge, to 50,000 yuan ($7,900) from 44,000 yuan. This was confirmed by a finance ministry statement. Subsequently, the new rules have specified at least 150 kilometers on a single charge as benchmark to be eligible for incentives, which used to be 100 kilometers earlier. This boosts the production and sale of EVs while making it more difficult for battery-powered vehicles to qualify for any new incentives under a central government plan.

Government subsidies have been a major strategy in making EVs more affordable in China, helping the market surpass the U.S. as the world’s biggest EV market. According to a Bloomberg report, the Chinese government is letting provinces continue with local subsidies for EVs to sustain the rising demand for new-energy vehicles in the country. This is going to be huge demand boost for aluminium bodied EVs that are cheaper than carbon fiber and can help significantly in boosting the range by keeping the body weight low. Aluminium cars can also help achieving substantial weight reduction in the powertrain.

The new rules have cut subsidies by varying degrees for cars with a driving range of less than 300 kilometers. Besides, EVs with battery energy density above 105 watt-hours per kilogram are eligible for the subsidies under the new rule. The government also cut subsidies to half for buses that qualify as new-energy vehicles, depending on the range and nature of the powertrain.

China’s new policies towards encouraging green cars have benefitted Chinese automakers like BYD Co. and other including BAIC Motor Corp. and Anhui Zotye Automobile Co. while opening a market for aluminium part manufactures and aluminium suppliers.