China bans local NEV protectionism

Recently, four government departments jointly issued a notice, which says that the new energy vehicle subsidy policy needs adjustment and that local governments are prohibited from taking any protectionist measures.

This notice, issued by the Ministry of Finance, the Ministry of Industry and Information, the Ministry of Science and Technology and the National Development and Reform Commission, points out that a unified market should be established and that any form of local protectionism, including but not limited to setting up local NEV product catalogues, asking manufacturers to establish factories locally and buy locally produced auto parts, should be forbidden.

The central government will reduce the awards and subsidies of charging infrastructures for relevant local governments once the local government has been considered to take protectionist measures.

According to the notice, local governments should step up efforts to invest in infrastructure construction and improve the usage environment of new energy vehicles. From 2018, the local purchasing subsidy should be used in the construction and operation of charging infrastructure facilities and also the usage and operation of new energy vehicles.

What’s more, the notice also requires raising the threshold of power battery system in accordance with the development of power battery technology and encourages the application of high-performance power batteries.