Can Tesla’s EVs sold in China receive subsidies from the Chinese government? The answer is yes!
The Ministry of Industry and Information Technology of China just announced a new energy vehicle promotion situation. It mentioned that Tesla received the highest subsidy liquidation amount, reaching RMB 2.1 billion ($310 million), and 101,000 Tesla vehicles were approved.
The cars liquidated for subsidies account for about 68% of Tesla’s 2020 sales in mainland China. Tesla sold 147,997 new energy vehicles in China in 2020.
In 2020, Tesla sold 499,500 new energy vehicles worldwide. That’s to say, the sales in China account for 30% of Tesla’s total sales share.
Not only Tesla but also automobile manufacturers such as BYD, Chery and DongFeng, and other companies have received subsidies. For instance, BYD has the largest number of approved vehicles, reaching 117,000, and the subsidy amount was RMB 2.047 billion ($309 million) in 2020.
In 2020, almost 1.4 million EVs were sold in China. According to MIIT, 620,600 were eligible for subsidies. The total amount government used to support the EV market in 2020 was 11 billion RMB ($1.7 billion).
The Chinese government has subsidized the EV sector heavily since 2016. Between 2016-2020 Beijing spent 33 billion RMB ($5.2 billion) on supporting new energy vehicles (hybrids, pure EVs, hydrogen). The main receivers were Tesla, BYD, BAIC, Great Wall, SAIC, and GAC. For example, BYD accounts for 12% of that amount as they managed to receive 4 billion RMB ($620 million) in the last four years.
How can new energy vehicle manufacturers get subsidies from the Chinese government?
1. Enterprise declaration;
2. Approved by the expert group;
3. According to the number of new energy vehicles promoted by enterprises. Determine the subsidy fund after rounding.
Interestingly, we found some facts through these data:
On average, in mainland China, as long as a car company can sell one new energy vehicle, an automaker can obtain an average government subsidy of about RMB 20,000.
Calculated according to the current exchange rate, about 3100 US dollars.
Source: People’s Daily via Sina Finance