China’s electric vehicle (EV) industry has experienced rapid growth in recent years, largely driven by generous government subsidies. While this support has helped China emerge as a global powerhouse in the EV sector, a closer look reveals that a significant portion of the subsidies may have been disbursed improperly. Even some of the country’s leading EV manufacturers, such as BYD and Chery Automobile, have reportedly received funds they were not entitled to.
An investigation into China’s EV subsidy program, covering the period from 2016 to 2020, found that approximately 864 million yuan (around 3.9 billion baht at current exchange rates) was paid out to automakers that did not meet the qualifying criteria. For example, Chery received about 240 million yuan (around 1 billion baht) in subsidies for roughly 8,860 electric and hybrid vehicles that were not eligible under the program.
The Ministry of Industry and Information Technology of China also revealed that BYD received around 143 million yuan (approximately 649 million baht) for just 4,900 vehicles. However, it remains unclear whether the excess subsidies have been returned to the government or deducted from future payments.
China’s EV subsidy program was launched in the early 2010s and offered up to 60,000 yuan (approximately 272,000 baht) per vehicle. The subsidies were paid out in bulk to automakers, who were expected to pass the savings on to consumers through price reductions. However, the system soon became a target for abuse. In 2016 alone, it was reported that many companies fraudulently claimed a total of more than 9.3 billion yuan (around 42 billion baht) in subsidies.
Authorities are now closely monitoring the domestic EV market. Automakers have been urged to put an end to the ongoing price wars and stop relying on questionable sales targets to boost delivery numbers. Recent reports indicate that some companies have been delivering large quantities of vehicles to intermediaries and dealers, who then register them to be counted as official sales. These vehicles later reappear on the market as so-called “zero-kilometer used cars.”
Source: Carscoops
