According to industry sources, the Ministry of Finance of China is planning to look into 20 automakers, including Hyundai Motor Company, Nissan, BYD, JAC and Geely, to find out whether they have pocketed its green car subsidies in an inappropriate way.
Under the circumstances, experts are saying that this implies a significant change in the green car policy of the Chinese government and Hyundai Motor Company and Kia Motors, which have just set foot in the market, are likely to be negatively affected by it. Besides, South Korean electric vehicle battery manufacturers such as LG Chem and Samsung SDI are also forecast to be affected as the Chinese government is looking to drive them out by means of new certification standards. Beijing Hyundai, a joint venture established by the former, is planning to launch the Sonata Plug-in Hybrid in China in April next year and Dongfeng Yueda Kia’s K5 PHEV is scheduled to make its debut in the country in October 2017.
Last year, more than 331,000 green cars were sold in China and the size of the market more than quadrupled compared to the previous year. At present, approximately 200 electric vehicle manufacturers and 150 or so electric vehicle battery manufacturers are doing business in the Chinese market.
From 2013 to last year, the central government of China provided a subsidy of 28.4 billion yuan for the industry and those from local governments amounted to approximately 20 billion yuan. The governments, however, are going to reduce their electric vehicle subsidies by 20% in 2017 to 2018 and by 40% in 2019 to 2020 before repealing the subsidies in 2020.