by Chinese Subsidies for Electric Vehicles: Millions Obtained Illegally
A Chinese audit has found that companies that did not meet the criteria received electric vehicle subsidies totaling over 121 million dollars. Among them are well-known manufacturers such as BYD and Chery, which, according to the audit, received funds for vehicles that did not meet the requirements. The Chinese government has not yet confirmed whether the misused funds were returned.
China’s subsidy program for electric vehicles, which ran from 2016 to 2020, contributed to the rapid growth of the industry. However, the audit showed that the system was vulnerable to abuse. For example, Chery received about 33 million dollars for 8,860 vehicles that were not eligible for support. BYD, in turn, received 20 million dollars for 4,900 cars.
The subsidy program was aimed at stimulating the market but opened opportunities for fraud. In 2016, dozens of companies illegally obtained about 1.3 billion dollars.
System Problems and Ways to Solve Them
Chinese officials are calling on automakers to stop the price war and artificial inflation of sales volumes. Recently, it has become clear that many companies registered cars through dealers to formally show them as sold, after which they entered the market as “new with mileage.”
The subsidy program, which in the early 2010s provided payments of up to 8,400 dollars per car, contributed to making electric vehicles cheaper for consumers. However, the lack of clear control led to large-scale abuses. The government is now trying to improve support mechanisms to avoid similar situations in the future.
The issue of reimbursement of misused funds remains open. Some experts believe that such cases could affect trust in the Chinese auto industry at the international level, especially in the context of fierce competition in the global electric vehicle market.
