China to end EV subsidies by 2021

China is set to let subsidies for electric vehicles (EVs) expire completely by 2021 to let the market decide which cars to build to meet emissions targets.

Until now China has offered large subsidies to support the uptake of ‘new energy vehicles’, which encompasses all vehicles that do not rely solely an internal combustion engine, such as EVs, plug-in hybrids, hybrids and fuel cell vehicles.

However, it has been confirmed that these incentives will be cut by 20 per cent by the end of 2017 and 40 per cent by the end of 2019. By 2021 the country plans to completely scrap all subsidies to allow the market to dictate the best technologies to meet emissions targets moving forward.

Lou Jiwei, China’s Finance Minister, said: “Credit trading is the most effective way to ensure government neutrality on the technology’s development. The market should be able to choose the technical route.”

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