Brief:

Dec. 31th, 2021, in order to further promote the high quality development of new energy industry, as well as promotion and application of new energy vehicles, Ministry of Finance issued a notice on the subsidy policy for promoting new energy vehicles in 2022.

1.The background of the Notice

In accordance with the decisions and arrangements of the Party Central Committee and the State Council, since 2009, the Ministry of Finance and relevant departments have vigorously supported the development of the new energy vehicle industry. With the joint efforts of all parties, our country’s new energy vehicle technology level has been continuously improved, product performance has been significantly improved, and the production and sales scale has ranked the first in the world for six years.

April, 2020, the four ministries (the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the National Development and Reform Commission) jointly issued the notice of improving the policies on Government Subsidies for Promotion and Application of New Energy Vehicles (Finance and Construction [2020] No. 86). “In principle, the subsidies for 2020-2022 shall be cut by 10%, 20% and 30%, eligible vehicles for public transportation. The official business of Party and government bodies shall not be reduced in 2020, but the reduced in 2021-2022 by 10% and 20% respectively from a year earlier. In principle, the subsidized vehicles shall be capped at roughly 2 million units per year. “In 2021, facing the adverse effects as the spread of the global epidemic and the shortage of chips, new energy vehicle industry still achieve substantial growth, and the industry is developing in a good trend. In 2022, the subsidy policy will continue to decline in an orderly manner according to the established arrangements, which create a stable policy environment. The four ministries recently issued the Notice, clarifying the relevant requirements of the financial subsidy policy.

 2.The subsidy standard for the purchase of new energy vehicles in 2022

According to Financial and Construction [2020] No. 86 document, the subsidy standard for the purchase of new energy vehicles in 2022 will be reduced by 30% on the basis of 2021. Regarding eligible new energy vehicles for public transportation, road passenger transport, rental (including online ride-hailing), environmental sanitation, urban logistics and distribution, postal express, civil aviation airports as well as the official business of Party and government bodies in 2022 shall be reduced by 20% on the basis of 2021. Following this, the Notice clarifies the subsidy standards for different types and fields of vehicle products and will be implemented from Jan. 1^st, 2022.

 3.Technical Indication Requirements for New Energy Vehicle Products in 2022

In recent years, driven by the subsidy policy to support the excellent and the strong, the supply quality of our country’s new energy vehicle products has continued to improve, the technical level has been significantly improved, and the product practicability has been greatly improved. According to Financial and Construction [2020] No. 86, “In 2021-2022, the overall stability of technical indicators shall be given in principle. In 2022, the purchase subsidy policy will maintain the same for power battery system energy density, driving range, energy consumption and other technical indicators threshold to stabilize enterprise expectations.

4.Clarification of Deadline for Purchase Subsidies

In accordance with the requirements of the Financial and Construction [2020] No. 86 document, taking integrated technology progress and economies of scale into account, implementation period of the fiscal subsidy policy for the promotion and application of new energy vehicles will be extended to the end of 2022. Considering factors such as the development plan of new energy vehicle industry, market sales trends and the smooth transition of enterprises, in order to maintain the good development momentum of the new energy vehicle industry and stabilize the expectations f the industry and consumers, the Notice clarifies that the purchase subsidy policy of new energy vehicles shall be terminated on Dec. 31st, 2022, and vehicles registered after Dec. 31^st will no longer be subsidized.

5.About further strengthening Product Safety Supervision

Safety of new energy vehicle concerns the interests of customers, which is the fundamental basis of the healthy improvement of new energy vehicle industry. As the new energy vehicles with intelligent network characteristics are gradually applied to the market in recent years, it makes the data security, cyber security and etc. become the vital issues. Vehicle on fire and safety incidents occur time to time still in our nation. To further strengthen the supervision of product safety, ensure both vehicle quality and information security, and protect the interests of customers, NOTIFICATION clearly states that the supervising system of new energy vehicle safety shall be improved comprehensively, and the responsibility of enterprises who manufacture new energy vehicles shall be practically specified. In the meantime, the cross-department information sharing system and the reporting system of vehicle incident shall be set up against the situation such as vehicle on fire, vital incidents and etc. The qualification of vehicle subsidy shall be suspended or cancelled in case the enterprises hide the incident, or do not cooperative with the investigation.