China's new-energy vehicle market is set to post a slower growth rate of 18.3 percent this year compared with a 53 percent expansion last year, consulting firm AlixPartners said yesterday.
The slowdown is due to reduction of tax incentives and the government's subsidy cut on new-energy vehicles, the company said.
"The number of new-energy vehicle models approved for central government's subsidy is expected to fall this year compared with last year," said Xu Qian, AlixPartners' China head of automotive practice.
Xu added that new energy vehicles approved last year need to be reviewed and re-evaluated according to the government subsidy policy announced this year.
The cut in tax incentives also has an impact on the slowing growth of green cars. Starting from January 1, the purchase tax for small-engine vehicles of 1.6 liters or below rose to 7.5 percent from 5 percent last year.
AlixPartners estimated that 600,000 new-energy vehicles will be sold this year, up from 507,000 units last year. The firm sees electric vehicles to take up 83 percent of total sales in 2017.
The company predicts China's new-energy vehicle sales to grow 35 percent to 40 percent annually in the next three years. Sales of such vehicles are expected at 1.5 million units in 2020 — three times those of green cars last year, AlixPartners said. Its figure is below the government's target of 2 million units by 2020.
About half of the electric vehicle models that are set to launch globally by 2020 will be from Chinese carmakers.
