China slashes taxes on green autos

330 models of new-energy vehicles will be available in tax-free policy

China, the world's second largest new-energy vehicle market, is once again making the purchase of a new-energy vehicle much easier and lighter on customers' wallets.

The Ministry of Industry and Information Technology and the State Administration of Taxation recently announced that 330 models of new-energy vehicles can be purchased free of tax. Officials said the move would help boost the development of the new-energy vehicle industry, transform the transportation and energy sectors and help protect the environment.

More new-energy buses will be put into public service across China. Hu Qingming / China Daily

This is the fourth time that the central government has rolled out a tax-free purchasing plan for new-energy vehicles, following moves in August, October and December.

The list of available new-energy vehicles include 295 pure electric models and 35 plug-in hybrids. Among the pure electric autos are 26 models of passenger car, 191 buses, 77 special-purpose vehicles and one van; plug-in hybrid models include two passenger cars and 33 buses.

The list only consists of Chinese brands and joint-venture brands, such as BAIC, BYD Auto, Geely and Foton Motor.

In a separate measure to put more electric buses on city streets, the Ministry of Finance, Ministry of Industry and Information Technology and Ministry of Transport last week jointly issued an updated policy on fuel subsidies for public buses. The ministries, which currently pay the cost of fuel for public buses in China's cities, will reduce fuel subsidies every year through 2019.

The hope is that the move will force cities to replace their public buses that run on fuel with new-energy models.

Ten cities and provinces will follow the new policy, including Beijing, Shanghai and Tianjin, as well as Hebei, Shanxi, Jiangsu, Zhejiang, Shandong, Guangdong and Hainan provinces.

Local Chinese governments have also undertaken moves of their own to put the central authority's preferential policies on new-energy vehicles into action.

Earlier this month, Beijing's development and reform commission set up a service price standard for charging electric cars, setting the price for every kilowatt of electricity the new-energy vehicle uses to no more than 15 percent of one liter of gasoline with a minimum octane rating of 92.

The service rate will go into effect from June 1 and operators of charging stations for electric autos will collect the fees. The city commission said that fees at charging stations will be adjusted to market prices on Jan 1, 2020.

The Beijing government agency said it hopes the service price standard will attract more capital to the construction of new-energy vehicle infrastructure.

"I believe the infrastructure construction of new-energy cars will improve very quickly - once the government sets up a rule, the market will do the rest," said Bao Wenguang, CEO of Xindayang Electric Vehicle Technology Co Ltd, a domestic electric car manufacturer.

But the city government's move will likely raise the cost of using new-energy cars, which would influence potential buyers of such cars.

"Plug-in hybrid cars will be better than pure electric cars if charging prices for electric cars are linked with gasoline prices", said Zheng Zheng, 42, a resident of Beijing.

Zheng, who said he has been following news about the new-energy car industry for more than a year, is considering buying a second car for short distance trips in the city. But he said he won't buy one now because of his concerns over a new-energy car's range and charging infrastructure.

"Charging is not convenient and takes a long time. The range of electric cars is also short. And the car itself is normally more expensive than ones that run on gasoline. So I think a car that uses gas is more convenient, and plug-in hybrids are more practical than pure electric ones," Zheng said.

Emerging market

With growing awareness of environmental protection and the need for sustainable growth, green travel is becoming a trend in China.

According to the Ministry of Industry and Information Technology, 9,060 new-energy vehicles were produced in China in April, up one and a half times year-on-year.

Through the first four months of the year, new-energy vehicle production in China reached 34,400 units, almost three times the same period last year. Among those, 15,900 pure electric passenger cars were produced, followed by 8,780 plug-in hybrid passenger cars and 6,416 pure electric commercial vehicles - five times the amount from the previous year. More than 3,300 plug-in hybrid commercial vehicles were produced, up 70 percent year-on-year.

The Chinese government and its policymakers are making a series of preferential policies to encourage people to use electric cars.

In 2012, the State Council set an ambitious goal of getting 500,000 new-energy cars on the nation's roads by the end of this year, and 5 million new-energy vehicles by 2020.

Dong Yang, secretary-general of the China Association of Automobile Manufacturers, sees a bright future in the sector.

"Barring accidents, I believe China's new-energy vehicle market will surpass the United States to become the world's largest this year."

duxiaoying1@chinadaily.com.cn

(China Daily 05/18/2015 page19)