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Higher subsidy threshold for energy-saving vehicles

China will raise the threshold for subsidies to energy-saving vehicles starting October 1. Cars weighing 1,205 to 1,320 kilograms must have average fuel consumption lower than 6.3 liters per 100 kilometers to qualify for state subsidies. The new rule will replace the existing fuel criterion of 6.9 liters per 100 kilometers, in place since June 1, 2010.

Consumers will continue to receive ¥3,000 ($462) for purchasing qualified vehicles.

Under the new rules, 16 vehicle weight categories will be reduced to seven. All qualifying automobiles must have 1.6-liter engines or smaller.

The government disbursed ¥10.7 billion of subsidies for 3.57 million energy-saving vehicles as of the end of August. The subsidies stimulated ¥300 billion of consumption and achieved an annual saving of 1.01 million tons of gasoline, according to the Ministry of Finance.

Energy-saving passenger vehicles with an engine less than 1.6 liters have increased from 101 models to 427 models. Over 4 million models which qualified under the old regulations where produced. This counts for 53 percent of all the vehicles under 1.6-liter displacement.

Ministry of Finance claims 60 percent of all new vehicles less than 1.6-liter displacement have reached the 6.9 liter per 100 kilometer benchmark. Ministry of Finance believes the newly produced 10 million vehicles next year under the third phase of fuel consumption target will save 2 million tons of fuel annually.

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