State of play
It is highly likely that individual municipalities will extend the "inner city" ban of gasoline two-wheelers to four-wheelers, as soon as they see a viable chance for their home car industry to grab a significant share of the EV market.
On 14 January 2009, China’s State Council introduced a government support plan for the auto industry, one of its “pillar industries”. Elements of the plan for the auto industry include:
- Over the next three years, providing a 10 billion yuan (US$1.46 billion) as a special fund to support auto companies to upgrade technologies, and develop new engines that use alternative energies.
- Offering financial support to promote the use of energy-saving autos and those fueled by new energies.
- Support automakers to develop independent brands and build auto and parts export bases.
- Urge improvements in the credit system for car purchase loans. More than 93% of Chinese vehicles are sold in the domestic market, but less than 10% are purchased on credit.
- Increasing subsidies for people to scrap their old cars.
- Encourage large auto companies, as well as major auto-parts makers, to expand through mergers and acquisitions so as to optimize resources and improve their competitiveness on the international market.
- Eliminating regulations that restrict car purchase.
- Lowering the purchase tax on cars of less than 1.6 liters displacement from 10% to 5% from 20 January through the end of 2009 to stimulate sales.
- Allocating 5 billion yuan (US$731 million) to provide one-off allowances to farmers to upgrade their three-wheeled vehicles and low-speed trucks to mini-trucks or to purchase new mini-vans of less than 1.3 liters displacement from 1 March through the end of the year.
