After four months of absence from the electric vehicle market, the Chinese government's new electric vehicle subsidy policy was released in April. But the amount of subsidies has been significantly reduced.
Four months of anxious waiting finally pays off, Mr. Wang rushed to the electric car dealer to settle down the contract early in the morning.
"We'd picked the ideal car in January but we decided to wait for the policy to come out," Wang said.
"The subsidy policy is becoming less favorable, that's a clear trend. Anyway it's better than no subsidies at all," said Mr. Zhang, electric vehicle customer.
EV dealers are even more frustrated. Thousands of contracts are signed, but few cars have been delivered.
The major problem lies in the number plate. In the past, EV subsidies included a free plate for electric and plug-in hybrid vehicles, which may cost at least 80,000 yuan for ordinary cars. Plus it offered a way around the less than one in ten odds people normally face in the city's license-plate lottery.
"From November 25th last year to the end of March, we haven't delivered a single car. We do have more than 300 orders, however. The clients are anxious, so are we," said Wu Di, sales director of BYD 4S Dealer, Shanghai.
"The sales volume of the new energy cars are higher than last year for the first quarter, but impacted by the policy, no clients have come to pick up their cars," said Gu Xujun, manager of Wanbang New Energy.
The good news is the subsidy policy in 2016 still provides free plates. However, the sum of money has been cut, and by a lot. In the past, the subsidy was 40,000 yuan for all new energy vehicles. Now, the sum is 30,000 for electric cars with ranges above 150 kilometers, and 10,000 for those below as well as plug-in hybrids.
"We need more time to communicate with the government to better understand the policy and explain to our customers. We're waiting for the detailed implementation guidelines now. Probably the earliest time for applying for the license plates is at the beginning of May," said Lyu Jingxi, general manager of Wanbang New Energy.
"Many vehicle models were tailored to fit the policy to get the subsidies. This behavior of automakers curbs the development of clean energy vehicle industry. The policy should have a long-term guiding effect, instead of a short-sighted boost of sales," said professor Kong Deyang, Clean Energy Automotive Engineering Center.
By rolling back subsidies faster, the government is aiming to encourage automakers to reduce the current high price of new energy vehicles, rather than relying on subsidies for profit, and urging healthy competition and development in the industry.
