The Chinese government plans to phase out subsidies for all electrified vehicles -- including fuel cell vehicles -- by the end of 2021, China’s ministry of finance said.
The ministry revealed the policy decision last week in an open letter addressed to SAIC Motor Corp. Chairman Chen Hong, who proposed that subsidies for fuel cell vehicles be extended beyond 2021 at the annual meeting of the National People’s Congress, China’s legislature, in March.
While reaffirming its plan to wind down subsidies for full electric vehicles and plug-in hybrids by the end of 2021, Beijing was previously vague on what to do with subsidies for fuel cell vehicles.
The current subsidy polices have resulted in “addiction” to subsidies among “some” fuel cell vehicle manufacturers, which has made it difficult for these companies to compete globally, the ministry noted in the letter posted on its website last week, without identifying the automakers.
While phasing out the subsidies, the central government will encourage provincial governments to provide incentives for construction of battery charging facilities for electric vehicles and hydrogen stations for fuel cell vehicles, the ministry added.
The Chinese government started subsidizing sales of EVs, plug-in hybrids and fuel cell vehicles in 2019.
Under the current subsidy program for fuel cell vehicles, passenger vehicles qualify for 200,000 yuan ($28,369) in subsidies; vans and light trucks are eligible for a subsidy of 300,000 yuan while buses and heavy-duty trucks can obtain 500,000 in subsidy.
In the first three quarters of this year, 1,251 fuel cell vehicles of various kinds were sold in China, 7.6 times the tally for the same period last year, according to the China Association of Automobile Manufacturers.