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Green vehicles get subsidies

By Chen Yang (Global Times)

08:07, May 30, 2012

China will allocate 1 to 2 billion yuan ($158-$316 million) a year to support the development of the new-energy vehicle industry from 2012, according to a statement from the Ministry of Finance yesterday, as part of the government's effort to boost the use of green vehicles.

Hybrid buses will be more widely used in large and medium-sized cities across the country, and the use of new-energy vehicles will be promoted in more public services, such as logistics and rental businesses, in 25 pilot cities, the statement quoted Vice Minister of Finance Zhang Shaochun as saying.

Zhang also urged the pilot cities to exempt new-energy vehicles from restrictions on the issue of license plates and limiting the use of cars on certain days, as well as introduce preferential policies for parking fees, electricity charges and road tolls.

Pilot cities that fail to meet certain scale standards for new-energy vehicle development will be disqualified from participating in the program, he noted.

The ministry's latest move came after China pledged to offer 6 billion yuan in subsidies for new-energy vehicles, according to a statement from the State Council published May 16.

Experts said yesterday that this is the fourth round of subsidies on new-energy vehicles, a move to reduce fuel consumption and carbon emissions.

"Previous measures to boost the new-energy vehicle industry have not achieved expected results, and the sector is still developing slowly in both public transportation and personal use markets," Cui Dongshu, deputy secretary-general of the National Passenger Car Association, told the Global Times yesterday.

Sales of new-energy vehicles amounted to 10,202 units in the first quarter of 2012, compared to 4.79 million vehicles sold overall during the period, the China Association of Automobile Manufacturers' data showed. But the country aims to bring the total output of electric and hybrid vehicles to 500,000 units by 2015 and 5 million by 2020, according to a development plan on the new-energy vehicle sector approved by the State Council in April.

However, experts are not optimistic on the effect of the newly announced subsidies.

"Consumers' concerns about new-energy cars include safety issues, battery performance, affordability and availability of battery-charging facilities," Qiao Shengpu, a partner at Adfaith Management Consulting, told the Global Times yesterday.

"Without solving technology and infrastructure barriers, the new-energy vehicle sector still can't develop as fast as authorities expect," he said.

An E6 electric car produced by BYD Co caught fire in a fatal car accident in Shenzhen Saturday. Though the carmaker said yesterday that the incident won't have a negative impact, it still raised public concerns over the safety of electric cars.

"The accident will affect the industry development as a whole, as safety problems are always consumers' top concern," Cui said.

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