New Energy Vehicle Subsidy Ends After Five Years

On August 5th, the First Division of Equipment Industry under the Ministry of Industry and Information Technology officially announced the final results of the clearance audit for the subsidy funds for the promotion and application of new energy vehicles from 2016 to 2020, with the calculated total amount reaching 1,654.6 million yuan. At the same time, the division also announced the pre-allocation of subsidy funds for the years 2021 to 2022. The implementation of this series of measures signifies that the 13-year-long subsidy policy for new energy vehicles has officially entered a new phase of comprehensive clearance.

In the 2021-2022 fiscal year, the pre-allocated amount of subsidy funds for the promotion and application of new energy vehicles reached 167.89 million yuan, benefiting 19 enterprises in 10 provinces and cities. Among them, BYD Automobile Co., Ltd. located in Shaanxi and BYD Auto Industry Co., Ltd. in Shenzhen received subsidies of 37.91 million yuan and 35.56 million yuan, respectively. Tesla (Shanghai) Co., Ltd. also received a subsidy of 30.15 million yuan. Additionally, joint ventures such as FAW-Volkswagen and SAIC Volkswagen received substantial subsidies in the millions. Among the new car-making forces, only Leapmotor appeared on the list of pre-allocated funds.

The Final Chapter of the Five-Year Settlement

Three months after the Ministry of Finance, the Ministry of Industry and Information Technology, and two other departments jointly issued a liquidation declaration notice, the long-awaited audit results have finally been presented to the public. The Equipment Industry Department of the Ministry of Industry and Information Technology clearly stated in the announcement that the audit work has been entrusted to the Telecommunications Liquidation Center of the Ministry of Industry and Information Technology for execution. The public announcement period is only seven days, with the deadline being August 11th.

In this liquidation review process, local regulatory bureaus played a leading role. Taking the Guangdong Regulatory Bureau as an example, the bureau successfully completed the review task by adopting a variety of measures. On one hand, they closely collaborated with the Provincial Development and Reform Commission and the Department of Industry and Information Technology to jointly sort out policy key points. On the other hand, they relied on the Ministry of Industry and Information Technology's new energy vehicle regulatory platform and local announcement systems to verify core data such as the number of vehicles declared, the amount, and the announcement time item by item.

During the review process, vehicles that did not meet the regulations were accurately screened out. The Guangdong Regulatory Bureau also dynamically tracked the flow of funds to ensure that subsidies, which passed the review, could be promptly allocated to localities or enterprises through the prescribed channels. The bureau specifically emphasized in the announcement that it will continuously monitor the allocation and disbursement of funds to "ensure the safe and efficient use of fiscal funds."

In this review process, a penetrating audit method was used. The local regulatory bureau utilized a dual-platform approach for cross-verification, with the Ministry of Industry and Information Technology's national regulatory platform providing vehicle operation data, while the local public platform was responsible for verifying the consistency of declarations. During the liquidation process, the Guangdong regulatory bureau found that some vehicles had discrepancies in technical indicators such as "insufficient mileage," and directly made deductions.

However, some historical issues were exposed during the clearance audit process. Due to some sales occurring five years ago, the automaker faced objective difficulties in tracing original vouchers. In a statement, Chery Automobile admitted that during the sales process from 2016 to 2020, policies did not require dealers to collect terminal receipts, which led to a reduction of 140 million yuan in subsidies due to "voucher discrepancies." However, Chery also emphasized that "there were no violations in the declaration process."

The storm of subsidy cuts

Chery Automobile's ordeal has revealed the harsh side of subsidy clearance audits. In the initial review results announced by the Ministry of Industry and Information Technology in early July, the declared vehicles of several automotive companies faced significant subsidy reductions. Chery urgently issued a statement clarifying that the subsidy reduction of over 140 million yuan was not due to "subsidy fraud," but rather resulted from changes in policy implementation standards.

Chery explained in the statement, "The 2025 annual declaration is a consolidated declaration of new energy vehicles from 2016 to 2020 that were not declared in previous years. Subsidies will only be granted after approval by the four ministries and commissions; it is not the case that the company has already received subsidies that now need to be returned." The company also revealed that it had consulted government departments regarding the issue of missing documentation and was advised to "report as fully as possible in accordance with the notice."

The underlying issue in this liquidation review lies in policy coordination. In April 2023, the Ministry of Finance revised the "Interim Measures for the Administration of Energy Conservation and Emission Reduction Subsidy Funds," extending the policy implementation period to the end of 2025 and designating the liquidation of new energy vehicle subsidies, incentives for charging infrastructure, and fuel cell vehicle demonstrations as the three key areas of support.

Policy adjustments have brought changes to the review standards. According to the current regulations, provincial financial departments are required to conduct a comprehensive verification of enterprise funding applications. However, the retrospective terminal voucher for vehicle sales after five years has placed automakers in a predicament of missing historical data. Chery stated that its application materials had previously passed audits by both provincial and municipal audit institutions, and that the reductions were part of the normal process.

Policy continuation and intensified efforts

On August 6th, an announcement from the Ministry of Finance brought good news to electric vehicle owners: the policy of exempting electric vehicles from license plate tax is proposed to be extended for the fifth time. The revised draft will authorize local governments to continue exempting electric vehicle license plate tax until the end of 2029, extending the original expiration date of 2025 by four years.

For a mainstream electric vehicle with 262 horsepower, the owner can save 11,230 yuan annually in license tax, totaling over 44,000 yuan during the four-year exemption period. The Ministry of Finance stated in the policy announcement that this measure aims to "achieve the government's phased goal of transportation electrification" and "achieve net-zero emissions by 2050."

The integration of vehicles and the grid has become a new direction for the development of new energy vehicles. In the implementation opinions on vehicle-grid interaction released by four departments including the National Development and Reform Commission in January, clear targets were set: to establish a technical standard system by 2025 and to achieve large-scale application by 2030. By then, new energy vehicles will serve as "mobile electrochemical energy storage resources," providing the power system with adjustment capabilities in the tens of millions of kilowatts.

Greater financial support is also on the way. Just the day before the subsidy clearance was announced (August 5), the People's Bank of China and six other departments jointly issued the "Guiding Opinions on Financial Support for New Industrialization," which calls for directing capital towards the new energy industry. The guiding opinions propose measures for multi-level financing channels and long-term capital deployment. It suggests opening the main board, the Science and Technology Innovation Board, and the Growth Enterprise Market, among other multi-tiered capital markets, to support direct financing for new energy enterprises; and promoting the deployment of government funds, state-owned enterprise funds, and insurance funds in the "future energy" direction to address the long-term challenges of technology research and development.

As long-term capital begins to flow into frontier fields such as hydrogen energy and nuclear fusion, the financial support system for the new energy vehicle industry is undergoing a critical transition from "extensive blood transfusion" to "refined blood creation."

Backtracking Policy Path

The new energy vehicle subsidy policy has undergone three major shifts. Before 2016, a "universal" subsidy was implemented, which led to the emergence of fraudulent subsidy claims. From 2017 to 2020, the policy introduced technical threshold criteria. Starting from 2021, the subsidy standards began to decline by 20% annually.

The policy adjustments in 2023 are of watershed significance. When the Ministry of Finance amended the "Interim Measures for the Administration of Subsidy Funds for Energy Conservation and Emission Reduction," it, for the first time, listed the demonstration and application of fuel cell vehicles as a special subsidy, suggesting that frontier areas such as hydrogen energy will become new support priorities.

The subsidy approach is gradually shifting towards refinement. The practice of the Guangdong regulatory authority illustrates this point. By adopting a variety of measures, they successfully completed the task of clearing and reviewing subsidy funds for the promotion and application of new energy vehicles, ensuring the safe and efficient use of fiscal funds. At the same time, they are also actively focusing on new directions such as vehicle-grid integration, laying a solid foundation for the future development of the new energy vehicle industry. Local audits have established a comprehensive regulatory system of "pre-policy sorting, mid-platform verification, and post-fund tracking." This model effectively reduced non-compliant vehicles in the 2025 liquidation process, preventing the loss of fiscal funds. The role of tax leverage continues to stand out. Since the implementation of the license tax exemption policy in 2012, it has been extended five times, prompting the number of electric vehicles to surge from 300 to 97,000, an increase of 306 times.