Phasing out subsidies puts green cars on right track

THE CENTRAL GOVERNMENT has said it will cut subsidies to new energy vehicles by 20 percent this year from 2016 levels, and urged local governments not to offer subsidies that exceed 50 percent of those provided by the central government. Changjiang Daily commented on Wednesday:

The authorities started subsidizing new energy automakers eight years ago to expand the production and sales of electric cars, plug-in hybrids, and fuel-cell cars. The total amount of subsidies that have been provided reached 33.4 billion yuan ($4.81 billion) by the end of 2015. As a result, the country has become the world's largest market for new energy vehicles.

For sustainable growth of the industry, government support was necessary in the initial stages, but the manufacturers of new energy vehicles must now focus on innovation and quality. Thus it is right for the government to raise the threshold for new energy automakers to receive subsidies, which are set to be phased out by the end of 2020.