GUANGZHOU -- China's automakers are set to sharply raise prices on electric cars and other environmentally friendly vehicles starting next week as the government slashes subsidies that had made the country the world's largest market for electrics.
Top player BYD's popular Yuan EV360 sport utility vehicle "costs about 90,000 yuan ($13,000) now, but that [could] rise by 20,000 to 30,000 yuan starting on the 26th," when the new subsidy levels take effect, said a representative at a Guangdong Province auto dealership.
China has used generous incentives to foster growth in its electric-vehicle industry and related fields, driving down prices for consumers. As so-called new-energy vehicles gained traction, Beijing began scaling back this support in 2017, with plans to end it entirely in 2020.
Next week, subsidies will be roughly halved to between 18,000 yuan and 25,000 yuan for passenger vehicles with ranges of at least 250 km per charge and eliminated entirely for cars with shorter ranges. The deep cuts leave automakers with little choice but to pass the burden on to customers.
"Price hikes are unavoidable," said a sales staffer at a dealership for second-ranked BAIC Motor.
Chinese sales of electrics and plug-in hybrids swelled 60% or so to 1.25 million vehicles in 2018. The government targets sales of 2 million in 2020, but the subsidy cuts may make this goal harder to achieve.