The Chinese Ministry of Industry and Information Technology recently announced the audit results of the subsidy funds for the promotion of new energy vehicles from 2016 to 2020. It revealed that many well-known car companies received significantly less subsidy funds than their initial applications, leading to an industry-wide deduction of approximately 860 million yuan.
According to the preliminary review by the Chinese Ministry of Industry and Information Technology, during the five-year period, the total amount of subsidy funds applied for by various car companies was around 29.3 billion yuan. However, the actual subsidy funds to be settled amounted to only about 20.7 billion yuan, resulting in a difference of 8.6 billion yuan. The number of vehicles reported for promotion also decreased from 75,814 to 54,089.
Among the affected enterprises, BYD (including its several subsidiaries) saw the largest deduction in subsidy funds. In 2019 alone, BYD reported 2,907 vehicles for promotion, applied for 83.035 million yuan in subsidy funds, but ultimately only 303 vehicles received subsidies, totaling around 8.11 million yuan, a reduction of approximately 74.925 million yuan from the application amount. Cumulatively over five years, BYD saw a reduction of about 140 million yuan in actual subsidies compared to the applications.
Other car companies faced similar situations. Beijing Electric Vehicle Co., Ltd. experienced a reduction of approximately 97.04 million yuan in actual subsidy funds compared to the application amount over the five-year period. It is worth noting that Tesla participated in subsidy applications for the first time in 2020, with 538 vehicles reported and a subsidy amount of 11.2 million yuan, both meeting policy requirements.
The audit results revealed that the main reasons for the deductions were twofold: discrepancies in vehicle-related certificates not meeting the requirements for settlement notification applications, and companies failing to upload vehicle operation data as required.
Expert Zhan Junhao told “Daily Economic News” that the gap between the subsidy application and the actual amount received by car companies is mainly due to non-compliance in submitted materials or data uploads, which may not necessarily constitute subsidy fraud. However, there were indeed cases of illegal conduct by some companies in the early stages of the new energy vehicle industry. In 2016, the Chinese Ministry of Finance disclosed that five companies were suspected of subsidy fraud, involving an amount exceeding 1 billion yuan.
From a market development perspective, the sales volume of new energy vehicles in China has increased from 507,000 vehicles in 2016 to 12.866 million vehicles in 2024, with an average annual growth rate exceeding 50%. Experts believe that the new energy vehicle industry has significantly reduced its reliance on subsidies. Technological advancements and cost reductions have significantly improved the cost-effectiveness of products, leading market demand to shift from policy incentives to consumer-driven choices.
With the gradual reduction of subsidy policies and increasingly stringent audit standards, the new energy vehicle industry is transitioning from a “policy-driven” development mode to a “market-driven” model.