China to subsidize hybrid, electric vehicle purchases

The Chinese government will subsidize purchases of plug-in hybrid and battery-powered cars in a pilot program, the Wall Street Journal reported. Buyers of purely electric vehicles will receive up to US$8,8000 and buyers of qualified gasoline-electric hybrids will receive US$7,333. The two-year program will start this year in Shanghai, Hangzhou, Changchun, Shenzhen and Hefei. Auto executives said the subsidies are likely to only be applied to domestic brands, although the government’s statement was not explicit on the point. Most likely to benefit from the policy is Chinese electric car maker BYD (1211.HK), which has already launched a fleet of electric taxis in Shenzhen this year. Nissan Motor (7201.TYO) is planning to introduce its all-electric Leaf model in China next year, but it is unlikely to benefit from the subsidies. Nissan executives said that if such subsidies were offered, the company would consider producing the car in China.