Abstract:

China’s Ministry of Finance, Ministry of Industry and Information Technology (MIIT), Ministry of Science and Technology, and National Development and Reform Commission on March 26, 2019, jointly released A Notice of Further Adjusting Fiscal Subsidies for Promoting New Energy Vehicles. A new energy vehicle (NEV) is a battery-electric, plug-in hybrid, or fuel cell vehicle, and the Notice provides a detailed formula to determine the subsidy due to consumers who buy a new battery electric or plug-in hybrid vehicle in 2019. The Notice outlines tightened requirements to qualify for the subsidy and provide a revised formula to determine the subsidy’s size. Further, it includes guidance regarding the paired incentive from local governments, and a few provisions to enhance the overall effectiveness of the program. The last section of this policy update describes a special provision regarding how the current and new policies connect during the transition period.