Reuters And WSJ Get Unglued Over Chinese Plug-In Subsidy

Bertel Schmitt
by Bertel Schmitt

China has finally revealed its worst kept secret and announced a pilot program for five Chinese cities. It’s raining cash for buyers of electric vehicles and plug-in hybrids. And it “reflects Beijing’s resolve to foster domestic brands,” says Reuters.

Really? At first glance, there is no discrimination against laowei cars.

In the cities of Shanghai, Changchun, Shenzhen, Hangzhou and Hefei (Beijing notably missing) subsidies of up to 60,000 yuan ($8,784) go to buyers of pure electric vehicles, says China Daily. Buyers of plug-in hybrid cars will receive up to 50,000 yuan ($7321).

Buyers of hybrids? They get a handout of 3,000 yuan ($440) says China’s Ministry of Finance on their website.

This has Klaus Paur, director at TNS’s North Asia spin the yarn that “the Chinese car manufacturers are the main target for the subsidies and they should be the main beneficiaries.” Except that there aren’t many to participate in the boondoggle.

Reuters sees BYD’s elusive F3DM plug-in hybrid as the car that gets the money. The subsidy translates into a nearly 30 percent discount to the MSRP of 169,800 yuan ($24,870). It needs all the help it can get. It saw only 48 fleet sales last year.


Government money would also eventually benefit indigenous auto makers with electric or plug-in hybrids in the works. When they finally get to releasing them.

Reuters sees a bias against foreign car makers like Toyota, which have hybrids without a plug. The Prius sure could use a charge in China. While being the top-seller in Japan, in China its sales are mediocre.

Not letting facts get in the way of a good conspiracy, Reuters complains that “Beijing did not specify whether imported green cars like General Motors’ plug-in hybrid Chevy Volt and Nissan’s fully electric Leaf are eligible for the rebates.” Well, they are. The Finance Ministry doesn’t rule them out. (Some Chinese needed.)

The Wall Street Journal sees even darker clouds, people might riot: “Already, the move provoked resentful comments from some ordinary Chinese who question why the government is using public funds to subsidize car purchases for wealthy buyers. The issue is particularly sensitive in China, where social tensions are running high over a widening gap between rich and poor.”

Speaking of darker clouds, the Hybridcarblog has fundamental issues: “China derives 83 percent of it’s electricity from coal.”

Local observers think it’s much ado about nothing. “Price is not the only reason that keeps people from adopting EVs today. The infrastructure and the drive range are some of the other critical issues for people to think about,” said Raymond Tsang, partner at Bain & Co. Mr. Tsang seems to be the only one who has his head screwed on tight in this matter. My personal projection: The Chinese government is so generous with the subsidies, because it will be one of the cheapest stimulus programs: No takers.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Wsn Wsn on Jun 02, 2010
    At first glance, there is no discrimination against laowei cars. -- What is "laowei"?
  • Blowfish Blowfish on Jun 02, 2010

    At first glance, there is no discrimination against laowei cars. – What is “laowei”? = Old outsider , foreign devil, Gringo. Perhaps as one bloke suggested this incentive is more of a window dressings, as not many takers going to take to prize anyways. Godforbid if it go somewhere, as its going to have more Brown outs someone will be getting their Brownie points. In a way its subsidizing the haves, the have nots atleast wont have to smell more gas fumes.

    • See 1 previous
    • Sqrl Sqrl on Jun 03, 2010

      Wow you really know your shit Bertel, pretty rare to see on most China topics.

  • TheMrFreeze That new Ferrari looks nice but other than that, nothing.And VW having to put an air-cooled Beetle in its display to try and make the ID.Buzz look cool makes this classic VW owner sad 😢
  • Wolfwagen Is it me or have auto shows just turned to meh? To me, there isn't much excitement anymore. it's like we have hit a second malaise era. Every new vehicle is some cookie-cutter CUV. No cutting-edge designs. No talk of any great powertrains, or technological achievements. It's sort of expected with the push to EVs but there is no news on that front either. No new battery tech, no new charging tech. Nothing.
  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
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