Research on Improving Incentives for the Application of New Energy Vehicles in Urban Transportation

Electric Vehicle News: At the recently held "Commercial Vehicle Sustainable Development Forum" hosted by the Electric Vehicle 100 People Association, Cai Tuanjie, Director-General of the Department of Transport Services at the Ministry of Transport, delivered a speech emphasizing that the current operational subsidy policy for new-energy buses is set to expire, making it urgently necessary to explore ways to extend the relevant support measures. The Ministry of Transport, in collaboration with related departments, is currently working on refining and improving policy initiatives such as incentives for promoting and applying new-energy vehicles in urban transportation, as well as enhancing convenience for new-energy urban logistics and delivery vehicles in terms of traffic access.
When summarizing past achievements, Director Cai Tuanjie stated that during the 13th Five-Year Plan period, the transportation sector became the main force in promoting and applying commercial vehicles in the public service field. By the end of the 13th Five-Year Plan, the transportation industry had cumulatively deployed over 1 million new-energy vehicles, significantly surpassing the original target of 600,000 units. Among these, new-energy buses, urban logistics delivery vehicles, and taxis reached 470,000, 430,000, and 130,000 units, respectively.
Moreover, in the next phase, the transportation sector will continue to play a vital role in promoting and deploying new-energy vehicles. In the "14th Five-Year Plan for Integrated Transport Services" and the "14th Five-Year Plan for Green Transportation," both released by the Ministry of Transport in 2021, it was clearly stated that by the end of 2025, the share of new-energy vehicles in urban public buses, taxis, and logistics delivery services nationwide will reach 72%, 35%, and 20%, respectively.

Although companies face clear challenges, their business conditions remain tough. Take new-energy buses as an example: since terminal sales peaked in 2016, sales have shown a noticeable year-on-year decline over the past five years. In 2017 and 2018, sales dropped by 13% compared to the previous year; in 2019, the decline widened to 16%; in 2020, it fell by another 22%; and in 2021, the drop reached 20%. As a result, total new-energy bus sales for 2021 amounted to only 40% of the 2016 level. In its 2021 annual report, Yutong Bus noted that the bus industry is inherently a weak-cycle sector. The overall market size not only depends on the total volume and structure of passenger travel but is also heavily influenced by national and local government policies. During the reporting period, factors such as recurring COVID-19 outbreaks, shifting new-energy subsidy policies, and the triple pressures of shrinking domestic demand, supply shocks, and weakening economic expectations collectively led to a 15.31% year-on-year decline in demand for large and medium-sized buses in China. For the industry as a whole, this translates into declining market sales—but the underlying reason lies in the erosion of demand. Specifically, the primary source of demand for new-energy buses comes from public transportation companies across various regions. However, urban bus procurement typically relies on phased payments or financing arrangements facilitated by local governments. Consequently, local fiscal budgets directly impact the financial health of these bus operators. Currently, with subsidies already significantly reduced and further constrained by the pandemic, purely policy-driven incentives are clearly insufficient to motivate local governments to allocate adequate budgetary resources to support the sector.
Director Cai Qiantuan clearly stated this time that the operational subsidy policy for new-energy buses has reached its expiration, making it urgently necessary to study and extend relevant support measures. These emerging issues require joint efforts from all stakeholders—including the government, society, enterprises, industry associations, and experts—to continuously advance and address them. He also highlighted the work being actively carried out—or soon to be launched—by the Ministry of Transport to further promote and popularize new-energy vehicles across the transportation sector.
First, guided by the dual-carbon goals, we will further accelerate the refinement and improvement of our policy and standards framework. This includes promoting a comprehensive green and low-carbon transformation of transportation services, speeding up the renewal and phasing out of high-emission operational vehicles, and enhancing policy support for operations, tolling, parking, and charging infrastructure. We’ll also expedite the planning, layout, and construction of essential infrastructure such as charging/swapping stations and hydrogen refueling facilities, while establishing a robust system of maintenance standards for new-energy vehicles. At the same time, we will hasten the establishment of a comprehensive monitoring, reporting, and verification system for energy consumption and carbon emissions in the transportation sector. Additionally, we’ll explore the development of an evaluation and assessment mechanism for carbon reduction in the transportation industry, alongside management performance incentive programs and an incentive scheme to recognize leading-edge efficiency among transportation enterprises.
Second, we will fully implement the requirements for building a transportation powerhouse and further leverage the leading role of demonstration projects. We will systematically integrate the promotion and application of new-energy vehicles into the pilot initiatives for building a transportation powerhouse, deeply advancing demonstration efforts such as the construction of national public transit cities, the Green Travel Initiative, and urban green freight distribution projects. During the 14th Five-Year Plan period, we will select and designate approximately 50 cities to launch the national public transit city program, focus on establishing around 100 green travel-friendly cities, and steadily roll out about 100 demonstration projects aimed at fostering green freight distribution in urban areas. Additionally, we will continuously support the "Green Travel Sustainability Project," accelerating the development of charging infrastructure networks. By harnessing the guiding power of these demonstration projects, we will encourage localities to adopt comprehensive strategies, enhance the quality of green travel facilities, and progressively drive the transition of urban public transit, taxis, and urban logistics delivery systems toward new-energy alternatives.
Third, we will strengthen inter-departmental collaboration to further establish a new framework for the development of new-energy vehicles. Together with relevant departments, we will study and refine policy measures such as incentives for promoting and applying new-energy vehicles in urban transportation, as well as initiatives aimed at facilitating the operation of new-energy urban logistics and delivery services. We will also work closely with related agencies to accelerate the construction of charging and battery-swapping infrastructure, enhance the recycling, cascade utilization, and resource regeneration system for power batteries, and bolster coordination between transportation companies and vehicle manufacturers, encouraging carriers to not only prefer purchasing these vehicles but also feel confident in their use. Meanwhile, we will strengthen monitoring of vehicle operations, continuously track developments in autonomous driving technology, and promote the deep integration and collaborative advancement of transportation with information and energy sectors—jointly shaping a new paradigm for the growth of the new-energy vehicle industry.
Article excerpted from Dianche Hui, published on March 29, 2022, in Beijing

Translated from Sina Auto

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