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Upcoming Chinese subsidies for new energy automobiles may help support development of hybrids (Shanghai March 13) – The Ministry of Industry and Information Technology is currently researching introducing new subsidies for new energy and energy efficient automobile purchases, reported today. The news comes from a statement made by MIIT Minister Miao Wei. The new subsidies, which are based on fuel efficiency, are expected to be of major help to hybrid vehicles.

According to Mr. Wei, the MIIT is researching new subsidies which are based on vehicles' fuel economy rather than on their power system. The policy will rank eligible vehicles into 16 different classes based on their fuel economy. Vehicles with better fuel efficiency will be awarded larger subsidies. Mr. Wei explains that the subsidy for vehicles in the lowest fuel economy class will be set at 3,000 yuan ($478.33), with more fuel efficient vehicles eligible for bigger savings. "We want to encourage the introduction of more state-of-the-art products from [automobiles] manufacturers," Mr. Wei stated. He adds that the MIIT will strive to release the new subsidies in the next few months.

Hybrid vehicles look to be a major beneficiary of these new subsidies, as they offer substantial fuel savings compared to traditional gasoline vehicles. In contrast with Japan, the US and other countries, hybrids have not received a great deal of attention in Chinese government subsidies, which have previously mainly been aimed towards pure electric vehicles.

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