China's subsidies for new energy vehicle purchases are set to decrease by 30 percent in 2022 compared to this year.
With China's subsidies for new energy vehicles (NEVs) set to begin rolling back on January 1, Xpeng Motors is offering a short transition period for consumers.
For consumers who make a deposit before 24:00 on January 10, 2022, Xpeng will continue to offer them the same subsidy amount as in 2021, according to information recently released by the company.
For those who purchase a car after that date, if the Chinese government does not issue a new policy, they will see a 30 percent reduction in the subsidies.
China's Ministry of Finance released a plan on April 23, 2020, to reduce subsidies for NEVs by 10 percent, 20 percent and 30 percent each year from 2020-2022, respectively, from the previous year.
The plan also mentioned that from 2020, the pre-subsidy selling price of new energy passenger cars must be below 300,000 yuan (including 300,000 yuan) to enjoy the subsidy.
However, in order to encourage the development of battery swap as a new business model, vehicles supporting battery swap are not subject to this requirement. Therefore, even though Xpeng's local counterpart Nio's models are all priced above RMB 300,000, consumers can still enjoy the national subsidy.
On December 1, Nio announced its subsidy program for consumers who purchase a vehicle this month, allowing owners who place orders this year but do not receive delivery until early next year to continue to enjoy the current subsidy amount.
Those who pay a deposit for the ES8, ES6 and EC6 by December 31, 2021, and receive delivery by March 31, 2022, will be eligible for the subsidy at the Chinese state subsidy rate for 2021, Nio said in a statement previously posted on its app.
With the expected reduction in state subsidies coming next year, Tesla already took action late last month by raising the price of the entry-level China-made Model 3 and Model Y.
Notably, Xpeng has actually scaled back the benefits offered to consumers, despite its promise to continue offering higher subsidies this year for consumers who pay a deposit before January 10.
Earlier this month, rumors surfaced that Xpeng's three currently available models, the G3i, P5 and P7, would have their benefits for customers reduced by about half, and local media Auto-time later cited company sources as confirming that these rumors were true.
Starting December 13, new customers would have their purchase benefits package and purchase loan benefits reduced after placing an order, the report said, citing salespeople at Xpeng stores.
Xpeng's benefits package for P7 buyers will be reduced by RMB 5,000-10,000, P5 by RMB 4,000 and G3i by RMB 5,000, and most models will no longer offer 0-interest or low-interest loan packages, according to the report.
The move may be due to pressure from rising supply chain prices and is also related to the further rollback of China's NEV subsidies in 2022, the report said, citing industry sources.
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