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China’s Electric Car Companies Slump Amid Reports Of Subsidy Cuts

The Economic Times

Shares in China’s new energy vehicle (NEV) makers and other firms in the industry chain are pummelled, after media reports that Beijing this year could continue to cut subsidies for NEVs.

The CSI new energy vehicles index, which tracks major NEV players on the mainland, skids as much as 2.7 per cent.

Wuxi Lead Intelligent Equipment leads the decline, tumbling as much as 9.1 per cent.

Warren Buffett-backed electric car maker BYD drops 8.3 per cent at one point, and down ~0.5 per cent in Hong Kong.

Starting from Feb 2019, policies on NEV subsidy cuts could be officially implemented, with a cut of 30 pct for the transition period of Feb-June, and with an up to 50 pct cut from July 1, domestic newspaper China Times reported, without quoting sources, but added the news has not been confirmed by policymakers.

China’s biggest lithium battery maker Contemporary Amperex Technology, Eve Energy, Shenzhen Capchem Technology and Yunnan Energy New Material down in the range of 4.2-6.4 per cent.

The sharp share falls come even as China plans to introduce policies to boost domestic spending on items such as autos and home appliances this year.

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