The central government is considering telling local governments to stop offering subsidies for new-energy vehicles (NEVs) and electric cars in order to discourage protectionism and help rein in government expenditure, Bloomberg reported on Monday, citing sources.
The Ministry of Finance is working on a plan that would make local authorities phase out the incentives, the people said on condition of anonymity. The plan to cut down the payments may be implemented as early as 2018, a source said.
A separate report by domestic news site cs.com.cn said on Sunday that Beijing could be the first city to stop offering such subsidies. The report said central fiscal subsidies would favor high-mileage, low energy-consumption vehicles but the scrapping of local-level subsidies next year is likely to happen.
Such a move could potentially hit companies such as BYD Co and BAIC Motor Corp, according to Bloomberg.