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The unconventional rise of new energy buses and the increasing coverage of new energy vehicle subsidy scams in the media ultimately led relevant departments to initiate subsidy verification in 2016. At the same time, the expectation of further adjustment of new energy subsidy standards shrouded the whole year. Fang Jianhua said that at that time, there were excessive subsidies from the central government plus local subsidies and inadequate supervision, which led to fraud by individual companies, speculation by some companies and irregular behavior by most companies. 2016 was a year of entanglement.

Finally, the industry waited for nearly a year for the adjustment to be finalized by the end of 2016. On December 30, 2016, new subsidy standards were introduced. On the basis of improving the previous hard indicators for range and energy consumption per unit load capacity, the new subsidy coefficient has incorporated the requirement for system energy density, with a system energy density of no less than 85Wh/kg for passenger cars and no less than 90Wh/kg for passenger cars. And the subsidy amount has further declined. The subsidy amount is linked to the battery capacity. Pure electric buses exceeding 10 meters in length can receive a maximum subsidy of 300000 yuan per vehicle, and local government subsidies cannot exceed 50% of the central subsidy.

With the expansion of scale and technological progress, the cost of batteries has gradually decreased, and it is not surprising that subsidies have declined. However, the changes in assessment standards, especially the inclusion of system energy density assessment, still have a direct impact on the industry. Throughout the first quarter, the production and sales of new energy vehicles experienced a rare year-on-year decrease of 7.7% and 4.7%, respectively. Especially in January, sales were only 5682 units, which was about a quarter of January 2016, and it was very bleak.

Wang Yong, Executive Vice President of Guoxuan High Tech (002074. SZ), analyzed to Caijing that in the first half of this year, both vehicle manufacturers and battery companies were re listing the vehicle catalog around energy density issues. Therefore, there was not a significant shipment volume of electric buses in the first half of the year, but it laid a good foundation for future development.

The change in subsidy standards will also have a more profound impact.

Wang Yong analyzed to a reporter from Caijing that in the past, the subsidy standard was mainly based on the range, without any requirements for energy density. Companies with low technical levels could meet the range standard by installing more batteries, while companies with high-quality batteries were not differentiated. The current subsidy standards are more scientific, and policy adjustments are beneficial for large companies.

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