China paying automakers subsidies to produce electric-vehicles, plug-in hybrids

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Usually when you think of government incentives on new vehicle purchases you expect the customer shopping for a new car to get a tax credit if they purchase something that makes mother nature happy. Well, China is doing things a little differently.

The Chinese government has started paying subsidies of up to 60,000 yuan ($8,784 USD) a car to automakers that produce electric and hybrid vehicles. The Ministry of Finance said today that the program is currently in trial basis in five cities.

Private buyers of electric-vehicles will also get a 3,000 yuan ($440) subsidy from dealers, the ministry said. It said that the subsidies for purchases are being paid to “help promote faster technological innovation of automotive technology.

The cities where the trial is being held are locations of headquarters for major automakers including: Shanghai Automotive Industrial Corp., a partner of General Motors Co. and Volkswagen AG, FAW Group, a big state-owned automaker, BYD Auto, a major leader in electric vehicle development, Zhejiang Geely Holding Group, which recently bough Volvo from FoMoCo, and Chery Automobile.

– By: Kap Shah

Source: Detroit News