Adjustment to subsidies for new energy vehicles in China

Published: 2017.05.17

Hongyang Cui, Zifei Yang, and Hui He


On January 1, 2017, China implemented an updated subsidy program for battery electric vehicles (BEVs); plug-in hybrid electric vehicles (PHEVs), including extended range vehicles; and fuel cell vehicles (FCVs)—together commonly called new energy vehicles (NEVs). A jointly issued policy update on December 29, 2016, by China’s Ministry of Finance (MOF), Ministry of Industry and Information Technology (MIIT), Ministry of Science and Technology (MOST), and National Development and Reform Commission detailed the updated program design and adjusted subsidy amounts. The current policy, which will be valid through 2020 (2017–2020 Policy Adjustment), represents the sixth adjustment to the original policy introduced in 2009.

The 2017–2020 Policy Adjustment details subsidies for manufacturers rather than end users and features the phase down of a national subsidy, tightened vehicle qualification requirements, improved incentive design, and robust anti-fraud and enforcement measures. Details of the new policy and a comparison with other markets are in the full policy update.