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Subsidy policy changes reshape industry landscape

The development of the domestic new energy industry has always been closely related to changes in subsidy policies.

The beginning of the domestic new energy vehicle industry began in 2009 with the Ten Cities and Thousand Vehicles Project. The project was jointly initiated by the Ministry of Finance, the Ministry of Science and Technology, the National Development and Reform Commission, and the Ministry of Industry and Information Technology. Starting from 2009, it is planned to develop 10 cities each year, promoting 1000 new energy vehicles for demonstration operation in each city, with subsidies from the government. Finally, three batches of 25 cities were included in this project, and the subsidy ceased by the end of 2012, achieving sales of approximately 27000 vehicles.

In 2013, subsidies for new energy vehicles fell into a gap period until September 2013 when a new subsidy policy was introduced, with the subsidy standard differentiated by vehicle length. For example, pure electric buses over 10 meters in length can receive a central subsidy of 500000 yuan per vehicle, and local governments will also have supporting subsidy policies.

In April 2015, the Ministry of Industry and Information Technology and four other ministries announced subsidy standards for the period 2016-2020, which were changed to comprehensively consider the range and energy consumption per unit load capacity for subsidies. Among them, standard vehicles with a length of 10 to 12 meters can receive a subsidy of 500000 yuan per vehicle if they meet the conditions of a range of over 250 kilometers and a unit load capacity energy consumption of less than 0.25Wh/kmkg.

The high subsidies for passenger cars led to an explosive increase in new energy passenger cars in 2015. In 2015, the production of new energy passenger cars reached 125000 units, three times the previous year. For many battery companies, they faced the problem of insufficient production back then. Fang Jianhua recalled to a reporter from Caijing that 2015 was a crazy year.

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