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"Reward, not Subsidy" Proposed for Battery Industry

Date:03-02 16:34 Source:Economic Observer Authour:Liu Xiaolin

"Reward, not Subsidy" Proposed for Battery Industry

The concept of "replacing subsidy with reward" has now been launched.


It is worth noting that technical breakthroughs in battery technology are prioritized in the next round of supportive policies, and the concept of "replacing subsidy with reward" has now been launched.


As NEV sales declined in the first month of 2016, policy makers launched a new round of support.

Premier Li Keqiang chaired an executive meeting of the State Council on February 24 which decided on further measures to support the NEV industry, and breakthroughs in core technologies and prioritizing the development of medium and high-end NEVs are the targets for the next stage. The emphasis on technology and quality is the biggest highlight.

It is worth noting that technical breakthroughs in battery technology are prioritized in the next round of supportive policies, and the concept of "replacing subsidy with reward" has now been launched. This will also apply to the construction of charging infrastructure. Another key task in the next stage is to crack down on subsidy fraud in the NEV industry.

The meeting on February 24 emphasized that the NEV industry is to be market-oriented and innovation-driven. It will be expected to rely on mass entrepreneurship and innovation, to work hard to achieve new developments in core technologies, to break through industry logjams, and to develop at a faster pace. Five measures are proposed to these ends.

First, efforts will be stepped up to achieve revolutionary breakthroughs in battery technology. Enterprises of all sizes, colleges and research institutes will be encouraged to form open and shared power battery innovation platforms to jointly overcome technical difficulties, and make united efforts on the R&D of common and basic technologies such as key materials and systems. The central government will provide rewards rather than subsidies for companies in accordance with their performance, sales and other indicators of success, and will give more support to creating complete equipment for digital battery manufacture.

Second, the construction of charging infrastructure will be accelerated. The responsibilities, rights and benefits of local governments, property owners, developers, property management companies, and grid companies will be clarified, in order to encourage the construction of charging facilities in residential communities, on Party and government property, and in enterprises, institutes, airports, scenic zones and other public spaces. Investment in the central budget and special financial borrowing arrangements for the power distribution grid will be used to support such construction across the country. Local governments will be encouraged to implement reward and subsidy policies directed towards expanding their overall charging capacity, and charging fees will be reduced or cancelled.

Third, more NEVs will be used in sectors such as urban public buses, taxis, sanitation trucks and logistics vehicles. For central government, public institutions, and local governments in cities where NEVs are being promoted, the ratio of NEVs to the total number of vehicles purchased or upgraded in the current year will be raised to more than 50%, which is much higher than the ratio set two years ago. During the period from 2014-2016 the corresponding figure, as per the Implementing Plan for NEV Purchase by Government Bodies and Public Institutions released in July 2014, was only 30%.

Fourth, NEV quality will be improved. Measures will be taken to improve the access standard, intensify quality and safety supervision, develop NEV+IOT, enhance manufacturers' safety monitoring and the dynamic inspection of NEVs, and establish mechanisms like punitive damages.

Fifth, fiscal subsidies and other supportive policies will be improved, and restrictions on NEV purchase and use will be avoided or eliminated. There will be a crackdown on local protectionism and subsidy fraud. A reasonable investment return mechanism will be put in place to encourage private capital to enter service sectors such as the construction and operation of charging facilities, car leasing, and battery recycling. The NEV coordination mechanism and its office, under the State Council, will perform its coordination duties to the best of its abilities.

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