Back in May, the Chinese government finalized plans to offer strong incentives to buyers of certain types of green vehicles. The subsidies vary based on the classification of vehicle. For example, conventional hybrids are not included in the nation's incentive package, but battery-powered vehicles are eligible for a maximum subsidy of 60,000 yuan ($9,055 U.S. at the current exchange rate).

Recently, the China Car Times (CCT) wondered about the price discrepancy and why it seems designed to push the adoption of battery-powered autos. CCT came up with two possible reason:
Why will China develop E-drive vehicles? Only 2 reasons are rational. First, in the traditional field, such as inner combustion engine, gearbox, as well as HEV's mechanical-electric coupling, China is so too far behind the Western world in terms of technology, but in the electric-drive area, the gap is not so huge. In a word, E-drive vehicles are a better opportunity for China's automotive industry. Second, China's oil reserves are limited, but coal is plentiful and more importantly it's cheap
Is a lack of technological know-how pushing China to concentrate on developing electric vehicles? While this may seem like an odd claim, it reinforces the notion that EVs are relatively simple cars and the lack of complexity – compared to something like a series hybrid vehicle – means more room for more companies to participate. Maybe.

[Source: China Car Times]

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