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Local subsidies offered for individual purchase of new energy cars in 2009

With a considerable amount of local subsidies provided to those who buy new energy cars, the usually expensive fuel efficient hybrids and electric automobiles will become affordable to average families in Chongqing, Shanghai, Shenzhen and other places, according to a report in Shanghai Securities News

On May 11, the Chongqing municipal government announced that local residents could receive a subsidy of ¥36,000 ($5,270) if they buy the Chang’an Jiexun hybrid cars this year. Also they will be exempted from road tolls for three years worth about ¥7,000. So consumers could save as much as ¥43,000 for each car they purchase. 

The market price for a Chang’an Jiexun hybrid is around ¥140,000, while a traditional gasoline engine car sells at the minimum of ¥104,800. It is understood that the local government subsidies will cover 90 percent of the added cost of a hybrid version, far more than the subsidy standards used in Europe and the United States. 

Actually Chang’an has received orders of the Jiexun hybrid cars from all over the country, which will be delivered starting from June. These hybrid models have been designated for trial operation in a national drive of demonstrating 1,000 new energy vehicles in 13 major Chinese cities. “We would like to send cars to Kunming and other cities for demonstrating operation as well,” said Ren Yong, deputy director of Chang’an New Energy Automobile Company.

The national project to promote the use of energy-saving and new energy vehicles started in Chongqing last November. The local government took the lead in procurement of 10 units of the Jiexun hybrid vehicles and offered ¥20 million to Chang’an to support its hybrid car demonstration project.

“In three years, we will use more than 1,000 hybrid vehicles in various sectors citywide, including taxis, buses and government cars,” said Zhou Xu, director of Chongqing Science and Technology Commission.  

“A letter of intent for green partners” was signed in December between two cities of Chongqing and Denver, as well as Ford Motor and Chang’an Group, in which the four parties will make a 10-year cooperation in applying electric and hybrid vehicles to build Chongqing into a world-class R&D and manufacturing base for electric vehicles with key parts and components.  

Similarly, local governments in Shenzhen and Xi’an have also made plans as how to promote the large-scale application of new energy vehicles in these areas. So far Shenzhen has ordered 80 plug-in dual mode F3DM from BYD. Xi’an, one of BYD’s production bases, will buy a small number of electric cars for demonstration. Also it will be the next city for BYD to launch F3DM onto the market this year. 

In March 2009, Shenzhen was ready to offer local subsidies to private owners of new energy cars. It is planning to improve the city infrastructure for the electric car industry, while BYD is going to sell its plug-in hybrid car F3DM to individual consumers in September this year. 

Latest news from Shanghai says that the municipal government is planning to offer subsidies of up to 20 percent of the purchase price to people who buy new technology vehicles that could save 15 percent or more of fuel in 2010 and 2011. As incentives purchasers of hybrid, all electric or fuel cell vehicles will be given some road toll breaks. Also, easier registration and more battery charging stations will be provided in the area. 

Currently a gasoline-electric hybrid vehicle costs more than ¥250,000. The maximum subsidy for a green passenger car will be ¥20,000, while commercial vehicles will have a compensation of ¥400,000. Shanghai has encouraged SAIC to produce new technology vehicles as its key business, and urged the public service sector to become pioneers in alternative vehicles.  

The new policy of promoting new energy vehicle consumption is expected to unveil in the second half of this year, in which measures to encourage people to buy new energy cars will be announced. Subsidies on new technology cars by the local governments may serve as a policy prelude for consumers.


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