China mulls 100b yuan in funding for charging stations for electric cars

The mainland is considering providing as much as 100 billion yuan (HK$126 billion) in government funding to build charging facilities for electric vehicles and spur demand for clean cars, according to two sources.

The policy will be announced soon, said the sources, who declined to be named. They declined to provide further details of the plan, such as how long the programme would last or whether the chargers would be compatible with cars made by US carmaker Tesla Motors.

Increased state funding would be a tailwind for carmakers coping with consumer concerns over the price, reliability and convenience of electric vehicles. It would also build on efforts by China, the world's biggest carbon emitter, to fight pollution and cultivate its electric vehicle (EV) industry, which includes BYD and Kandi Technologies.

"Charging infrastructure and EV growth is a chicken-and-egg situation," said Ashvin Chotai, managing director of research firm Intelligence Automotive Asia. "It's got to be a gradual process to scale up both EV sales as well as charging infrastructure. EVs are still not very attractive when compared with conventionally powered cars."

Among recent government initiatives, Beijing will exempt new-energy vehicles (NEVs) - defined as electric cars, plug-in hybrids and fuel-cell vehicles - from a purchase tax starting next month and has ordered government departments to buy such vehicles for their official fleets.

Supporting a strategic and emerging industry like NEVs is a "win-win" for industrial development and environmental protection, the central government said last month in the statement announcing the tax waiver.