Many Chinese automakers falsely declare to receive more subsidies

Chinese automakers including BYD and Chery were found to have claimed electric vehicle subsidies for which they were not eligible over a five-year period.

Video : BYD Atto 2 electric car model just launched in Vietnam.

China's industry regulator found that automakers including BYD and Chery claimed electric vehicle subsidies they were not eligible for over a five-year period starting in 2016. The total amount of false claims amounted to more than 864 million yuan (about $121 million).

Among them, Chery, China’s largest auto exporter, was found to have registered 240 million yuan in subsidies for about 8,760 ineligible electric and hybrid vehicles, while 143 million yuan related to about 4,900 vehicles sold by BYD was wiped off the books, according to preliminary results released by the Ministry of Industry and Information Technology (MIIT) late last month.

Many Chinese automakers falsely declare prices to receive additional subsidies.

The audit of the 2016-2020 electric vehicle subsidy program was launched across China earlier this year. In China’s Henan province, for example, a sample of 292 vehicles with a total of 475 million yuan in related costs was assessed, according to documents released by the local government.

It is not yet clear whether the companies will have to repay the erroneous subsidies. It is also unclear whether the government has deducted the money from payments to automakers. Representatives for BYD and Chery did not respond to requests for comment.

Beijing is tightening its grip on the auto industry, especially as a price war that has lasted more than two years has begun to bite into profits across the supply chain and raised concerns that the quality and reputation of Chinese-made cars could be damaged.

According to documents released by MIIT, some of the reasons why vehicles are excluded from the subsidy eligibility list include: the manufacturer failing to provide operating data for the vehicle, or the mileage does not meet the requirements.

Under pressure to meet sales targets, companies sometimes sell new cars wholesale to traders or dealers, who then register them so the companies can record sales. These nearly brand-new cars then reappear on the used car market as “zero-mile used cars.” China’s Ministry of Commerce has also held meetings to address the phenomenon, and has temporarily suspended consumer subsidies in some localities to investigate whether dealers are fraudulently obtaining refunds.

China has a decades-long national subsidy program to promote electric and hybrid vehicles, which began in the early 2010s, offering subsidies of up to 60,000 yuan per vehicle. The subsidies are paid to manufacturers in batches, which then reduce the retail price for consumers. But the system has created loopholes for fraud. According to a 2016 report by the People’s Daily, dozens of companies have been accused of evading subsidies totaling 9.3 billion yuan (about $1.3 billion).

The Chinese government has conducted several audits of its EV subsidy program in the past, but on a much smaller scale. The 2022 audit examined just a few automakers and a few hundred cars. This year’s audit, by contrast, assessed dozens of automakers and more than 75,000 vehicles.

Source: https://khoahocdoisong.vn/nhieu-hang-oto-trung-quoc-khai-khong-de-nhan-them-tro-cap-post1555551.html