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  • Writer's pictureRealFacts Editorial Team

China EV Subsidies EV Trade-Ins In Hopes of Boosting Demand

Electric vehicle connected to the charger

EV demand has been slowing dramatically since the big demand boom of recent months/years, in an effort to combat this, the Chinese government is offering large cash incentives for citizens who trade-in their cars for electric or hybrid models.

Jiahui Huang of the Wall Street Journal wrote, “Consumers who replace their cars with electric or hybrid vehicles can in some cases receive government subsidies of up to 10,000 yuan ($1,381) through the end of this year, China’s Ministry of Commerce and other departments said in a joint statement Friday. People trading in older cars for traditional cars with engine sizes of 2.0 liters and below are eligible for CNY7,000. China’s policymakers are trying to boost consumption amid subdued domestic demand in the world’s second largest economy. Estimated passenger car retail sales dropped 1.5% on year in April, swinging from a growth of 6.2% last month, China Passenger Car Association data showed Thursday.” Again, the Chinese government is doing this in hopes that it will boost domestic EV demand, some analysts remain skeptical about its ability to work.

Chinese economist Tommy Xie wrote, “The equipment upgrade and trade-in of consumer goods are not a panacea for solving China’s structural problems,” Xie believes that this new policy is a good “short-term” solution for China while they try to figure out how to have sustainability in their EV market going forward.

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