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Subsidize charging infrastructure, not new energy vehicles

– by Rao Da

In the first round of the car plate lottery in Guangzhou, only 186 individual and unit participants applied for the energy-saving and new energy vehicles, whose monthly quota is 1,090.

The disappointing result means two things: the number of eligible new energy models is limited and the local purchase subsidy policy proves wrong.

The new energy vehicle subsidy from local finance makes it hard for consumers to enjoy the subsidy on purchase of new energy vehicles that are non-locally produced.

Subsidizing non-locally produced NEVs does not help contribute to the GDP growth. Some places even refuse to list non-locally produced NEVs on the purchase catalogue.

The only way for vehicle manufacturers to sell their EV products in Guangzhou is to establish factories there. The present situation is, in Guangzhou there are few local carmakers that are producing new energy vehicles.

Such regional protectionism, a big obstacle to the development of new energy vehicles in China, has still not been solved by the Energy-Saving and New Energy Vehicle Industry Development Plan (2012-2020) which was released in July.

The other obstacle is that social infrastructure is not ripe for the use of new energy vehicles. There are very few charging poles built in Guangzhou. Nobody wants to invest in the charging infrastructure.

The solution is simple: cancel local subsidy for NEV purchases and subsidize the charging poles instead.

Construction of charging infrastructure should go ahead a bit. The construction work should be the duty of power companies so as to minimize the interest conflicts among different builders. In the meantime, the government should subsidize charging equipment manufacturers and builders to improve NEV service environment and increase local GDP.

The energy-saving and new energy vehicle promotion catalogue should be cancelled as well. The catalogue has been used as a tool to bar non-local products from entering the regional market. The ideal situation is that all the qualified NEV products can be sold among the six cities that currently enjoy purchase subsidies.

(Rewritten by Ray Jing based on an interview with Rao Da on d1ev.com)

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