China updates its electric vehicle incentives to favor longer range cars

China’s generous electric vehicle incentives enabled the world’s biggest auto market to quickly also become the world’s largest EV market.

There have been rumors that they could slash those incentives, but the government instead decided to update them in order to favor longer range cars.

Several cities in China offer their own incentives, but the changes came through the ministry of finance at the national level.

Electric vehicles with over 400 km (249 miles) of range saw a 13% increase in subsidies from RMB 44,000  to RMB 50,000 (~$7,800 USD).

Most domestic carmakers have been focusing on less expensive short-range EVs, but the change will benefit new companies focusing on long-range electric vehicles like Nio (pictured above) and Byton, as well as established players who have started producing longer range EVs, like BYD.

China also increased the minimum range required for any incentive from 100 km to 150 km (93 miles).

Inexpensive EVs with a relatively short-range have been popular in China in order to get around restrictions on gas-powered cars in cities with a lot of air pollution.

A good example is the popular Baojun E100, a small electric car made by GM’s Chinese joint-venture that can cost just $5,600.

The E100 is going to be safe with a range just over the new limit. Other EVs with ranges between 150 and 400 km are seeing the incentives updated with increasingly more generous rebates for higher ranges.

The government also updated subsidies for electric buses – significantly reducing them for battery-powered buses. For some reason, fuel cell bus subsidies are safe with the updated program.

Electric buses have been really popular in China due to those subsidies. Shenzhen has been building a large fleet of electric buses for years now, and it announced last year that it completely electrified its fleet with more than 16,000 electric buses.