China's MIIT Could Revoke 30 Companies' EV Car Qualifications

People's Daily: 30家车企新能源资质恐遭叫停

Faced with the problem of scattered new energy automobile industry in China, relevant domestic departments began to clean up the production qualifications of enterprises. On September 3, the Equipment Industry Development Center of the Ministry of Industry and Information Technology issued the "Notice on the Publicity of the List of Enterprises to Be Specially Reported on New Energy Vehicle Manufacturers (First Batch)" (hereinafter referred to as the "Notice"), and it is planned to stop production. The list of 30 companies with new energy vehicle products for 12 months and above is reported to the Ministry of Industry and Information Technology. The Ministry of Industry and Information Technology will publicize and verify, and the car companies that have not passed the verification will be ordered to stop production and sales activities. The industry believes that the new energy vehicles, which account for only 3% of total production and sales, are scattered in more than 200 auto companies. The Ministry of Industry and Information Technology will re-examine the production qualifications of 30 enterprises, which will undoubtedly start the domestic production and rectification. The first shot.

MIIT doesn't mention any further details. But mainland citizens know EV is really a joke. Nobody will buy those "terrible" EV. Expensive and futile!! Merely a way to coax subsidy. Each EV can get 10k RMB or more from gov't...

— Simon Ting (@simonting) September 4, 2018

Developing EVs brings in subsidy income. A couple of years ago the robotics industry was seeing "explosive growth" because companies were soaking up subsidies.

2016: Rent Seeking in China's Robotics Industry. From the quoted article:

More importantly, these places are given a real money signal - subsidies. Shenzhen, for example, from 2014 until 2020, the Shenzhen municipal finance will be arranged 500 million yuan each year, the seventh consecutive year grants robots, wearable devices and intelligent equipment industry. The Dongguan is scheduled in 2014-2016, the municipal financial arrangements for three consecutive years an annual budget of 200 million yuan, sponsored enterprises use advanced automation equipment for a new round of technological innovation, this is called "machine Substitution" program. The whole of Guangdong provincial government to be outdone, on April 18 this year, the province has just 2016 Industry and Information Technology development funds in the development of robot thematic funds of about 360 million yuan, reached at around the level to listing-related sectors.

...Insiders, who asked not to be named, symmetry, under profit-driven and the first (set) quantitative restrictions, some companies can register more than one company, the first sets of project funding application, or a company can apply for 10 units (sets) annual subsidy but if they create 10 companies then 100 (sets) products can enjoy the subsidy." This leads to the result that we sell 1,000 units of the product and earn less money than a company that sells 100." A robot company official lamented.

Back to the latest news on EV cars:

Article 23 of the Regulations shows that the Ministry of Industry and Information Technology will give special notice to new energy vehicle manufacturers that stop producing new energy vehicle products for 12 months or more. If the relevant enterprise is re-produced, it must be verified by the Ministry of Industry and Information Technology. If it is not passed, the Ministry of Industry and Information Technology shall order it to stop production and sales activities.

It is noteworthy that at the beginning of July this year, the Equipment Industry Department of the Ministry of Industry and Information Technology announced that the average fuel consumption of passenger car companies and the new energy vehicle points management platform (hereinafter referred to as “double point management platform”) have been launched, and double-point transactions for passenger car companies. Officially launched. In the eyes of the industry, the future double-point transaction will become an important solution to make up for the new energy auto companies to retreat from subsidies every year, and even stop the profits caused by the “deficit” and alleviate the cost pressure. Once the above 30 companies have been canceled, it means that they will lose their new energy vehicle points and have to purchase points to fill the gap.

It is worth noting that there are currently 15 companies that have obtained the qualifications for independent new-built pure electric vehicles, and only seven companies with dual-qualified pure electric vehicles. Since this year, policy subsidies have gradually withdrawn, and all will be withdrawn by 2020. This also means that the window period left for the car companies is not much. On the other hand, there are currently more than 200 companies waiting for qualifications, and these companies still have to guarantee capital and manpower investment during the queuing process.