China is in talks with automakers about extending costly subsidies for electric vehicles (EV) that were set to expire in 2022, aiming to keep a key market growing as the broader economy slows, three people familiar with the matter said, reports Reuters. The move by policymakers comes as the world’s second-biggest economy has slowed sharply—and auto sales along with it—after cities led by Shanghai imposed tight COVID-19 lockdowns from March. The curbs have shut stores, disrupted supply chains and slashed spending, including on new homes.
Government departments including the Ministry of Information and Industrial Technology (MIIT) are considering a continuation of subsidies to EV buyers in 2023, said the people, who declined to be named as the discussions were private.
China’s expensive incentive program has been credited with creating the world’s largest EV market. Since the subsidies began in 2009, some RMB 100 billion ($14.8 billion) has been handed out to buyers including commercial fleet operators up to end-2021, according to an estimate by Shi Ji, an auto analyst with China Merchants Bank International.