The Chinese government wants to end state subsidies for fuel cell vehicles by the end of next year, according to the Ministry of Finance.
So far it was only announced that the subsidies for battery electric vehicles will end next year. The Ministry justifies its decision by stating that China’s fuel cell industry “has not achieved any breakthroughs and rapid development despite the financial support”.
The promotion of the so-called “New Energy Vehicles”, i.e. most plug-in hybrids, battery electric cars and those with fuel cells, has been granted since 2009 in order to promote the development of clean vehicles and their distribution on the domestic market. However, it is precisely this practice that has led many small manufacturers in China to tap state funds for development, but the models cannot be purchased or can only be purchased in very small quantities. The government is now reacting to this. “Some car manufacturers are too dependent on subsidies and therefore find it difficult to survive in world markets,” writes the Ministry of Finance.
It is important to note that these are only subsidies from the central government, regional subsidy programmes are not affected. “Other measures can be taken to facilitate the purchase,” the Ministry said. “We believe that local authorities can take measures to promote the construction and operation of hydrogen filling stations and other infrastructure,” he said.
The regional measures will benefit fuel cell cars in the future, but not battery electric cars. Last summer, the Beijing government started cutting municipal subsidies for private electric cars. This means that manufacturers of fully electric vehicles will no longer receive subsidies from the respective city governments – this can only be done by the central government and only until the end of 2020. The background is the plan to slowly wean manufacturers of new energy vehicles from the subsidies.
Despite the announced ban on subsidies, the Chinese government continues to focus on the fuel cell. It was not until September that the goal was announced to have one million fuel cell vehicles on the roads by 2030. At the end of last year only 1,791 fuel cell vehicles were registered in China. According to the report, the government has set an interim target of 50,000 FCEVs for 2025.
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