Rules Changes to Push Authorities in Granting Subsidies Equally

Rules Changes to Push Authorities in Granting Subsidies EquallyEven being one of the biggest and polluted car markets in the world, BYD has sold only a few of their hybrid or battery powered electric vehicles outside of Guangdong because of the system of local subsidies. These rules are now being changed based on a new effort created by the Central Government in pushing local authorities in treating all Chinese car makers equally in granting green subsidies.

For the first time this year, big cities have relaxed its subsidy rules which effectively prevented sales of electric and hybrid vehicles by local manufacturers that are not based on their jurisdictions. These restrictions have drag on new energy car sales in China especially for BYD a manufacturer of cars, buses and batteries. Then in 2008, the company was the first Chinese automaker to produce electric vehicles that attracted an investment from Berkshire Hathaway Inc. for US$ 232 million.

For this year there is an inflection point in the Chinese electric car industry, and experts are expecting that sales for Chinese electric vehicles will continue to have strong sales growth in the next few years. BYD now hopes to sell 20,000 of its electric vehicles in 2014, which is a big increase compared to the 2,000 unit that they sold last year. The loosening of regulations in Beijing and Shanghai have already pushed the sales of plug in hybrids to 3,294 for the first four months of 2014 and around 8,000 more in production.

The change in tone only shows the broader policy shift that is happening in China as leaders are pushing to stimulate the demand for new energy vehicles in an effort to combat pollution and curbing oil dependence.

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