What are the similarities and differences between China and Germany's subsidy policies for electric vehicles?

At the end of the seventh China? At the "Lithium Industry-New Ecology" forum of the Qinghai Green Development Investment and Trade Fair, Jincaier, director of the German international cooperation agency GIZ Transportation and Energy, mentioned that Germany has implemented an electric vehicle subsidy policy in May 2016.

As countries pay more and more attention to environmental protection, the requirements for carbon emissions have become more and more stringent. The EU has decided to reduce greenhouse gas emissions by 40 per cent from 1990 levels by 2030, while Germany, a core member of the EU, will meet its high (or 40 per cent) emission reduction target, and the pressure to reduce emissions is enormous.

In addition, the "emission gate" scandal that broke out in 2015 has shaken the brand image and reputation of the German automotive industry, making the German automotive industry, which is already in a fierce market, even more difficult.

Faced with the heavy pressure to reduce carbon emissions and the severe situation in the international automotive market, the German automotive industry is in urgent need of a "turning around". As a result, Germany has focused its attention on electric vehicles, the industry's main trend in the future.

The Germans are on the road to government subsidies.

According to data from the beginning of 2016, Germany currently has only 25,500 pure electric vehicles and 130,000 hybrid vehicles. This compares with 45 million vehicles in Germany, and even 0.5 % penetration is not achieved.

But for such a weak electric car market, the Germans have not given up on their goals and are looking for a solution. In early 2016, German Chancellor Angela Merkel summoned several leading German car executives to discuss policies and subsidies for electric vehicles. The move comes after Sigma Gabriel, the German economy minister, pledged 2 billion euros to encourage consumers to buy electric cars. The money will be used to subsidize consumer purchases, build charging networks, and encourage government vehicles.

German approach to subsidies

In May 2016, the German Federal Cabinet formally passed a resolution to implement a series of policy subsidies such as electric vehicle subsidies and tax relief.

According to the regulations, consumers who buy pure electric cars in Germany will receive 4,000 euros (about 28,000 yuan) in subsidies from May 18, 2016, and will receive 3,000 euros in subsidies for the purchase of hybrid electric vehicles. The total amount of subsidies is 1.2 billion euros, which is divided between the government and car manufacturers. The "first come, first served" principle is adopted. The subsidies are issued until June 30, 2019 at the latest. Individuals, companies, foundations, associations and associations may apply for subsidies. But electric vehicles with a net price of more than 60,000 euros are not included in the subsidy.

In addition to direct subsidies, consumers who buy pure electric cars by 2020 will also enjoy a 10-year exemption from the car tax, which dates back to January 1, 2016. Employees can charge for free at the unit site and are not included in their "taxable income."

The German government will allocate 300 million euros between 2017 and 2020 to build 15,000 charging stations across Germany. The charging facilities will cover gas stations and parking lots along the main road, as well as shopping centers, stadiums and other locations. Alexander Dobrindt, the German transport minister, has also promised to build 15,000 new charging stations in Germany.

The German government will also "take the lead" and allocate 100 million euros for the purchase of electric vehicles as government service vehicles. It plans to gradually increase the proportion of electric vehicles in the government official fleet to 20 % from January 2017.

The German government has expressed its determination to support the development of electric cars with the introduction of new subsidies. The German government expects at least 300,000 more electric cars to be sold under the plan.

The similarities and differences of financial subsidies between China and Germany

The move by Germany to boost the market for electric vehicles with policy subsidies is "not new". China, which topped global sales of electric cars in 2015, has been "generous" in its policy subsidies for electric vehicles, which were at least Rmb30bn in 2015. There are many differences between our subsidy policy and German subsidy policy, which are mainly reflected in the following aspects.

Different recipients of subsidies

First of all, from the point of view of subsidies, our country not only subsidizes consumers, but also subsidizes new energy car manufacturers. All of Germany's subsidies revolve around consumers, and automakers do not get subsidies, but have to share them with the government.

The advantage of this kind of subsidy in our country is that it can not only stimulate consumers, but also increase the enthusiasm of car companies to develop, produce and sell new energy vehicles. Through the stimulation of both supply and demand, it can promote the rapid development of the entire electric car industry. In addition, in addition to giving subsidies to car companies, in order to stimulate their research and development, production, and sales of new energy vehicles, but also because China's automobile manufacturing industry does have a large gap compared to Germany, it needs the state to give financial and other support.

On the other hand, German financial subsidies are only aimed at consumers. For car companies, it does not matter whether they produce or sell new energy vehicles, but from the perspective of the development of the new energy automotive industry, they do not give subsidies to car companies. At the same time, it also means that the government does not interfere too much with the car companies and avoids policy subsidies that affect the company's choice of technology routes. On the other hand, because the car company is not a subsidy beneficiary, it also avoids the "deception" behavior of the car company to a certain extent.

Different sources of funding for subsidies

Compared with Germany, Chinese subsidies come entirely from the Treasury, and some provinces and municipalities have introduced subsidies to provide local subsidies at a certain percentage on the basis of central subsidies. In Germany, subsidies are split between the government and the car companies it has agreed to, and there are no local subsidies.

China's subsidies are obvious, whether consumers or car companies, there is a great temptation and incentives. But with such huge government spending, it is difficult to sustain it in the long run. Subsidies will inevitably recede. In contrast, the German subsidy method can greatly save provincial government spending, and the German government has set a total subsidy of 1.2 billion euros, which will be subsidized until 2019 at the latest. This also shows that the German subsidy policy is somewhat forward-looking. When formulating the policy, it takes into account the way and time when the subsidy is reduced.

There are also some who are skeptical about German subsidies: Will letting car companies bear half of the subsidy affect their enthusiasm for the development, production and sales of electric vehicles? In fact, the maximum subsidy of 4,000 euros per electric car is half that of the government and the car company, and the car company pays a maximum of 2,000 euros per car. The 2000 Euro for the car company can be counted as a concession to consumers, which is acceptable and will not affect the final profit of the car company.

On the other hand, agreeing with the government in terms of subsidies means tying the interests of the government and the car company together and putting the car company and the government together on the first front of promoting the development of new energy vehicles. Helps the sound development of the new energy vehicle market. Although the German move does not have the incentive of our subsidy, it also indirectly increases the enthusiasm of car companies. Currently, Volkswagen, BMW, Daimler and other car companies have reached an agreement with the government.

In addition, local subsidies are not a small expense for local governments. Therefore, according to the local economic level, the stipulated subsidy amounts are inconsistent and the subsidized models are not the same, which may lead to imbalances in the development of various cities and models. In addition, excessive local subsidies may also appear "local protection" phenomenon, hinder the orderly competition in the electric car market.

Different subsidy delivery processes

Consumers do not need to file applications and certificates to buy an electric car in Beijing, where they will have to pay a price net of state and local subsidies.

And buying a new energy car in Germany will cost only half of the car company's subsidy. When applying to the government for subsidies, it is necessary to prove that it has received subsidies from the car sales company before it can obtain government subsidies. According to media reports, the federal government has set up a special economic export control office to provide subsidies, although consumers need to pay for new energy vehicles. Subsidies are usually paid within four to five weeks, and the operation is very transparent.

In contrast, for consumers, our subsidy process is more convenient and efficient, eliminating many links. However, because consumers are not required to register, car companies are also "leaky". Although the German subsidy distribution process is more complex than our country, it can accurately count the consumer's purchase information and can also urge car companies to subsidize consumers.

Different categories and standards of subsidized models

China has a clear classification of subsidized models for electric vehicles. Including pure electric and plug-in hybrid (including augmentation) passenger vehicles, pure electric and plug-in hybrid (including augmentation) passenger cars, pure electric and plug-in hybrid (including augmentation) special vehicles, trucks and fuel Battery car.

In addition, China's subsidy policy has certain requirements for the quality of electric vehicles, and it needs to meet the standards to obtain subsidies, and the standards are still improving. The new subsidy standard for 2016, the mileage and speed of pure electric passenger vehicles that meet the subsidy standards, has been increased from 80km to 100km, and from no less than 80km/h to 100km/h.

The German subsidy only subsidizes passenger vehicles, with a requirement of less than 60,000 euros for models. It can be clearly seen that China attaches great importance to the development of electric vehicles in the field of public transport, and has clearer requirements for subsidized models and performance standards, avoiding the mixed situation of the new energy car market. But because subsidies helped companies choose the technology route, the cars that automakers developed and produced followed the policy, ignoring the real market demand.

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