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China Won’t Slash Electric-Car Subsidies in 2020, CNR Reports

China Won’t Slash Electric-Car Subsidies in 2020, CNR Reports

(Bloomberg) -- China won’t make substantial cuts in subsidies for new-energy vehicles in July, Minister of Industry and Information Technology Miao Wei on said Saturday, according to China National Radio.

“In order to stabilize the market’s expectation, and ensure the industry’s sustained development, subsidies on new-energy vehicles will stay relatively stable this year, and they won’t be scaled back significantly,” Miao said at an industry forum, according to China National Radio’s official Weibo account.

This would signal a potential boost to the industry that had been fearing another round of significant reductions this year. The government scaled back funding for purchases of new-energy vehicles in June 2019 to encourage automakers to focus on product innovation, triggering a drop in business. Electric-vehicle sales fell 15% in December from a year earlier, the sixth month of contraction.

Regulators were previously said to be considering further cuts to subsidies for electric vehicles this year.

Automakers in China are increasingly betting on electric vehicles for future growth. Tesla Inc. officially opened its multibillion-dollar Shanghai plant last week, and brands such as Mercedes-Benz and Volkswagen are also bringing out electric models.

To contact Bloomberg News staff for this story: April Ma in Beijing at ama112@bloomberg.net;Tian Ying in Beijing at ytian@bloomberg.net;Chunying Zhang in Shanghai at czhang714@bloomberg.net

To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Rene Vollgraaff, Sid Verma

©2020 Bloomberg L.P.

With assistance from Bloomberg