China raises the bar for subsidiesChina's electric car market accounts for a good half of the world market, so the subsidy cut for the production of electric cars will have an impact worldwide. Many foreign car manufacturers such as Ford, GM, Mercedes, Audi, Nissan, Peugeot, Jaguar, Hyundai and Mazda have production agreements in China, which will then be significantly less attractive.
The overall strategy is to encourage innovation in China’s car manufacturing industry and develop improved technology to keep its products competitive. The statement from China’s Ministry of Finance lists a number of goals to promote the production of higher-quality vehicles with longer range. The Chinese electric vehicle company BYD has also announced it will be investing around $1.5 billion in a new battery giga-factory able to produce 20 GWh of battery cells per annum to power its range of electric vehicles.