China’s Ministry of Finance Issues $6 Billion Advance Subsidy for New Energy Vehicles in 2022

Recently, China’s Ministry of Finance issued a subsidy aimed at achieving energy conservation and emissions reduction goals in 2022. The notice shows that the ministry has provided 38.5 billion yuan ($6 billion) in subsidies for new energy vehicles, including the settlement of subsidy funds for the promotion and application of new energy vehicles from 2016 to 2019, and the advance allocation of subsidy funds for the promotion and application of new energy vehicles from 2019 to 2020.

The funds will be distributed to local departments, and will be allocated to the new energy vehicle makers according to procedures after the start of the 2022 budget year.

According to the New Energy Vehicle Industry Development Plan (2021-2035) issued by the State Council in 2020, the penetration rate of new energy vehicles will reach 20% in 2025. In the first eight months of this year, the penetration rate of new energy vehicles exceeded 10%.

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According to data from the China Passenger Car Association, retail sales of new energy passenger cars reached 321,000 units in October, up 141.1% year-on-year. From January to October, the retail sales of new energy vehicles were 2.139 million units, up 191.9% year-on-year.