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NEV subsidies continue gradual phase-out

From:Internet Info Agency 2019-03-28 16:08:00

On March 26, the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the National Development and Reform Commission jointly issued a statement on subsidies of NEVs. Based on the new policy, IIA calculated the subsidies of popular new energy vehicles. Subsidies for pure electric vehicles have been reduced by up to 65,000 yuan, and that of plug-in hybrid vehicles have also generally decreased by 23,000 yuan.

At the same time, those popular models can meet the technical requirements for new energy subsidies in 2019, and can get a 0.6 times subsidy during the grace period before June 25. Compared with the substantial reduction after the implementation of the policy, it may be a better choice to purchase a car during that period.

1. How much does it cost to buy a new energy vehicle in accordance with the new policy?

According to the new policy, we selected some popular new energy vehicles for subsidy calculation. By comparison, we found that this subsidy policy adjustment has less impact on plug-in hybrid vehicles, and the subsidy reduction is generally 23,000 yuan. However, for the pure electric vehicle, the subsidy decline amount is generally more than 50,000 yuan. The highest drop is 65,000 yuan.

Note: Since the subsidy calculation formula involves the data of vehicle energy consumption adjustment factor that we cannot obtain. Therefore, the vehicle energy consumption adjustment factor in this table is set to 1, and the change in the subsidy amount in the table is for reference only.

Comparison of subsidies for NEVs

Model

Cruising Range (km)

Total subsidy in 2018 (10k RMB)

Total subsidy in grace period (10k RMB)

Total subsidy in 2019 (10k RMB)

Subsidy reduction (10k RMB)

Roewe Ei5

420

8.25

4.95

2.25

6

Roewe MARVEL X Rear Drive

403

8.25

4.95

2.25

6

BYD Yuan EV

305

7.425

4.455

1.62

5.805

BYD Qin Pro

420

9

5.4

2.5

6

NIO ES8

355

6.75

4.05

1.44

5.31

XPeng G3

365

7.425

4.455

1.62

5.805

WM Motor EX5

460

8.25

4.95

2.25

6

BYD Tang DM80

80

3.3

1.98

1

2.3

Made by Internet Info Agency (IIA)

2. Is it really expensive to buy a car after the subsidy is reduced?

After the policy released, the substantial reduction of subsidies has aroused the attention of consumers. For this reason, IIA has contacted a number of new energy auto companies for the first time. Currently, NIO, XPeng, WM Motor and other emerging automakers said that the price adjustment is being negotiated internally and will be announced as soon as possible. BYD, BAIC BJEV, Chery New Energy, JAC New Energy and other new energy companies also said that it will be announced for the first time if there is price adjustment.

Qiantu Motor said that its products will continue to give consumers preferential treatment according to the highest national subsidy and local subsidy standards in 2018. The Qiantu K50 will maintain a unified national price of 686,800 yuan, and the subsidy difference will be borne by the company.

In addition, GAC New Energy announced that in order to cope with the reduction of subsidies, they launched a “full compensation” plan, that is: when consumers purchase the GE3 530 and GS4 PHEV, they still can enjoy 90,700 yuan and 33,000 yuan respectively, which the national and local subsidies are involved, and the final price remains unchanged.

According to the new policy, after the end of the grace period, the GE3 530 can only enjoy a subsidy of 25,000 yuan, which is reduced by 65,700 yuan compared with that in 2018, and the reduction rate is 72.4%. The subsidy for the GS4 PHEV will also decline. Therefore, GAC New Energy's “Full Supplement” plan undoubtedly reassured consumers.

3. Why is the subsidy reduced so much?

First, let's take a look at the changes in the subsidy standards and technical requirements for new energy passenger cars in 2019 compared with that in 2018.

Comparison of subsidy standards in 2018 and 2019

Item

2018

2019

Cruising Range

Cruising Range (km)

Subsidies (10k RMB)

Cruising Range (km)

Subsidies (10k RMB)

100~150

0

100~150

0

150~200

1.5

150~200

0

200~250

2.4

200~250

0

250~300

3.4

250~400

1.8

300~400

4.5

≥400

5

≥400

2.5

Battery Energy Density

Energy Density(Wh/kg

Subsidy Coefficient

Energy Density(Wh/kg

Subsidy Coefficient

90~105

0

90~125

0

105~120

0.6

120~140

1

125~140

0.8

140~160

1.1

140~160

0.9

≥160

1.2

≥160

1

Cruising Range of PHEV (electric drive mode)

Cruising Range (km)

Subsidies (10k RMB)

Cruising Range (km)

Subsidies (10k RMB)

≥50

2.2

≥50

1

1. The subsidy amount of pure electric passenger car = Min{mileage subsidy standard, vehicle charge quantity × 550 yuan} * battery system energy density adjustment coefficient * vehicle energy consumption adjustment coefficient.

2. For new energy passenger cars that are not privately purchased or used for operation, subsidies are given at 0.7 times the corresponding subsidy amount.

Made by Internet Info Agency (IIA)

From the above table, we can see that the changes in subsidies and technical requirements for new energy vehicles this year are in the following aspects:

1. The minimum standard for pure electric cruising range has been raised from 150 km last year to 250 km.

2. The mileage subsidy standard is reduced to 2 stalls. Under 400 km, only 18,000 yuan can be subsidized, and over 400 km can get 25,000 yuan subsidy.

3. The energy density of the pure electric passenger car power battery system is not less than 125Wh/kg, and that of last year was 105Wh/kg.

4. The subsidy for PHEVs has dropped to 10,000 yuan.

5. Phase-out of local subsidies, subsidies for local vehicle purchases after the grace period, and subsidies for charging infrastructure.

6. Grace period: March 26, 2019 to June 25, 2019.

Like last year, this year's new energy subsidy policy also sets a grace period, but the difference is that this year's subsidies during the period are also divided into two categories:

1. If the technical requirements for subsidies in 2018 are met but do not meet the technical requirements of 2019, a subsidy of 0.1 times the subsidy standard for 2018 can be obtained;

2. If the technical requirements for subsidies in 2019 are met, a subsidy of 0.6 times the subsidy standard for 2018 will be obtained.

That is to say, if the technical requirements for subsidies for 2019 are not met, only 0.1 times of the subsidies for 2018 will be obtained during the grace period, and subsidies will not be available after the end of the grace period. It is also worth noting that local subsidies are still available for the purchase of NEVs during the grace period.

On March 25th, Volkswagen just introduced three pure electric vehicles. The energy density of these three models is only 121Wh/kg, which failed to meet the technical requirements for subsidies in 2019. Therefore, before June 25, these three models can only obtain 0.1 times subsidy for the 2018 policy, which is 3,400 yuan, and will not obtain new energy subsidies after June 25. However, as these three models have not yet been released, their prices are still unknown.

Summary: The adjustment of the subsidy for NEVs puts forward higher requirements on the technical specifications of the power battery, and can advance the research and development capabilities of the car enterprises. However, some insiders expressed their concern. After the announcement of the statement, improving the energy density of the battery system must be the top priority for all car companies at this stage. Some car companies may choose to get rid of the battery temperature control system pack for the weight reduction. They may use full air cooling instead, or even make some changes in the shell material of the power battery, which requires consumer attention.

Editor:Bai Yunpeng