China Just Decreased its Subsidy for ‘New Energy Vehicles’ by 30%

Tesla and other electric vehicle (EV) manufacturers may be subject to increased costs in 2021, due to decreasing new-energy vehicle subsidies in China.

China’s subsidies for new-energy vehicles will decline by about 30 percent in 2022, according to the recently-released New Energy Vehicle Subsidy Scheme as shared by @42how_.

The new subsidy program will continue through December 31, 2022, as detailed in the screenshot of the release.

@Ray4Tesla also pointed out that the changes in 2022 will be “critical” for automakers with the program’s discontinuation, especially as the Wuling HongGuang Mini EV is currently only profiting from subsidies – meaning it will be sold at a loss following the subsidy’s end.

In addition to the subsidy reduction, Tesla has already increased the price of its Model 3 and Y units in China for the second time in two months.

A rumor surfaced earlier on Friday saying that Tesla has sold 70,500 units in China in December, though it has yet to be validated.

In November, Tesla sold 52,859 cars in China, as shared by the China Passenger Car Association (CPCA).

Earlier this month, a drone flyover of Tesla’s Gigafactory Shanghai showed a super-full delivery lot, emphasizing the company’s current demand.

A report from last month also estimated that Tesla’s Shanghai production facility will hit an annual output of 1.3 million units.