NIO Is Down 20% In The Premarket, and It’s Probably Due To The Subsidy Cut.

“The subsidy for pure battery electric cars with driving ranges of 400 kilometers (250 miles) and above will be cut by half, to 25,000 yuan ($3,700) per vehicle from 50,000 yuan, the Ministry of Finance said in a statement Tuesday. To qualify for any subsidy, electric cars need to have a range of at least 250 kilometers, compared with 150 kilometers previously, the ministry said”. Bloomberg

“The consequence of the subsidy-fueled growth is that it also triggered excess production capacity, because everyone wants to benefit from government support,” said Claudia Liu, the regional compliance officer for Daimler Greater China, adding that some unnamed companies have even abused the subsidy schemes, by reallocating funds earmarked for EV production”. Fortune

source https://theicct.org/sites/default/files/publications/ICCT_China_Nev_Subsidy_20190618.pdf

https://theicct.org/sites/default/files/publications/ICCT_China_Nev_Subsidy_20190618.pdf

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