"The government should support the infrastructure construction for electric vehicles, since it is impossible for individual producers to afford it," said Chen Liquan, a researcher at the Laboratory of Solid State Ionics under the Chinese Academy of Sciences.
Currently, all the subsidy plans adopted by the government are reserved for EV purchases for public use, not personal use, with detailed rules for implementation still under consideration.
BYD's hybrid F3DM car sells for about 149,800 yuan ($22,029.4), almost 100,000 yuan ($14,705.8) higher than its F3 model, an identical car with an internal combustion engine instead of the hybrid power source.
"The battery alone costs 50,000 yuan ($7,352.9)," said Wang Jianjun, the assistant to General Manager of BYD Auto Co. Ltd.
"Government subsidies to the personal purchase of EV are vital to the development of EV manufacturers," said Wang Chuanfu.
Guidelines for New-Energy Vehicle Producers and the Establishment of The Industry Standards
The Ministry of Industry and Information Technology (MIIT) issued Guidelines for New-Energy Vehicle Producers and the Establishment of the Industry Standards on June 17, 2009. The new-energy vehicles include hybrid electric vehicles, battery electric vehicles (BEV, including solar energy vehicles), fuel cell electric vehicles (FCEV), hydrogen engine vehicles and other new-energy vehicles (such as dimethylether).
The guidelines divide new-energy vehicle technologies into start-up, developing and mature stages.
The start-up stage refers to the phase in which the realization paths of new energy vehicle technology principles are under research, there is no national and industrial standard, and no vehicle can be produced in mass quantities.
In the developing stage, the realization paths of new-energy vehicle technology principles are almost clear and most of the preparations for mass production of new energy vehicles are ready, but national and industrial standards still need improvement.
In the mature stage, the realization paths of new-energy vehicle technology principles are clear, product and production technologies are mature, national and industrial standards are complete and mass production is ready.
As for electric vehicles, according to the division by the MIIT, hybrid electric vehicles or battery electric vehicles that use lead-acid batteries and nickel/metal hydride batteries are in the mature stage, hybrid electric vehicles or battery electric vehicles that use lithium-ion batteries are in the developing stage, while vehicles of zinc-air batteries and fuel cell electric vehicles are in the start-up stage. This standard of division is valid until December 31, 2010.
The MIIT has adopted different management methods toward products in different stages.
For products in the start-up stage, only production of small quantities is allowed with demonstrated operation in approved regions, under certain conditions and for a specified period of time. The MIIT will also carry out real-time monitoring on the operating status of all products.
For products in the developing stage, batch production is allowed, but the products can only be sold and used in approved regions, under certain conditions and for a specified period of time. The MIIT will carry out real-time monitoring on the operating status of at least 20 percent of the sold products.
For products in the mature stage, their management, sales and uses are the same as those for regular vehicles.
The MIIT will organize a new-energy vehicle expert committee composed of specialists responsible for proposing suggestions of special technological conditions and testing standards applicable to new energy vehicles.
Policies on Promoting and Subsidizing New-Energy Vehicles
The Ministry of Finance and the Ministry of Science and Technology jointly issued provisional management measures on subsidy funds granted to the demonstrative promotion of energy-saving and new-energy vehicles on January 23, 2009. The measures make it clear that the government will, by subsidizing consumers and expanding the market, encourage the production, research and development of energy-saving and new-energy vehicles and promote the development of such vehicles in China.
According to the measures, promotions will be carried out in 13 cities including Beijing, Shanghai, Chongqing, Changchun, Dalian, Hangzhou, Jinan, Wuhan, Shenzhen, Hefei, Changsha, Kunming and Nanchang. The government will grant financial incentives to promote the use of energy-saving and new energy vehicles in public service sectors, such as public transportation, taxi, government affairs, environmental sanitation and the postal service. The Central Government will give lump sum subsidies to units of urban public service sectors in the demonstration cities that purchase and use energy-saving and new-energy vehicles. Local governments will subsidize expenditures in purchasing energy-saving and new-energy vehicles as well as the construction and maintenance of support facilities.
The subsidy standards are formulated mainly according to the price difference of energy-saving and new-energy vehicles from traditional vehicles, and factors of economies of scale and technological progress will also be considered. Detailed subsidy standards are as follows:
Passenger vehicles and light commercial vehicles:
- Hybrid electric vehicles: A maximum of 50,000 yuan ($7,320.64) per unit
- Battery electric vehicles: 60,000 yuan ($8,784.77) per unit
- Fuel cell electric vehicles: 250,000 yuan ($36,603.22) per unit
Urban buses of 10 meters or above:
- Hybrid electric vehicles of lead-acid battery: A maximum of 80,000 yuan ($11,713.03) per unit
- Hybrid electric vehicles of nickel-metal hydride battery and lithiumion battery: A maximum of 420,000 yuan ($61,493.61) per unit
- Battery electric vehicles: 500,000 yuan ($73,206.44) per unit
- Fuel cell electric vehicles: 600,000 yuan ($87,847.73) per unit