China's Guangzhou city to subsidise NEV sector
China's Guangzhou municipal government will offer a subsidy of 10,000 yuan/unit ($1,439) to new energy vehicles (NEVs) buyers during March-December this year to support the industry amid reduced demand caused by the coronavirus outbreak.
The auto industry is one of the main manufacturing sectors in Guangzhou's economy, with the city's automobile production accounting for 10.6pc of the country's total output. Guangzhou will also offer a Yn3,000/unit subsidy to consumers of fossil fuel vehicles.
NEV sales in Guangzhou totalled 68,099 in 2019, only behind Shanghai and Beijing in volumes, according to a report from Guangzhou's academy of social sciences.
Local authorities in Foshan city, also in south China's Guangdong province, started in February providing Yn2,000-5,000/unit subsidies to new car buyers. Guangdong's auto output reached 3.11mn units in 2019, accounting for 12.2pc of China's total production.
The coronavirus outbreakhas taken a toll on China's NEV market, with domestic production and sales forecast to fall in the first quarter.
The Chinese government was considering a delay in removing subsidies on NEVs, said the country's industry and information technology minister Miao Wei at a state council press conference on 20 January. Miao also said at an automobile industry conference that China will not significantly reduce subsidies on NEVs on 1 July after making cuts in 2019.
China produced 40,000 NEVs in January, down by 55pc from January 2019. Sales fell by 54pc from a year earlier to 44,000.
Demand for battery metals, such as cobalt, from the power battery sector is expected to increase in March, as local governments in China provide aid to support the NEV sector, according to market participants.
source: Argus Media
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