BYD, China’s largest producer of electric vehicles, says that recently announced cuts to government subsidies for new energy vehicles won’t impact the industry’s long-term growth.

In a filing to the Shenzhen Stock Exchange (SZSE) on Tuesday, the company said that the reductions will help shift the sector away from being policy driven to one driven by market conditions. BYD filed the disclosure after the company was asked by the SZSE to clarify issues in its 2018 annual report.

“Subsidies will have a short-term impact on demand and the profitability of new energy vehicle makers, but they will not alter the long-term growth trend of the new energy auto industry,” (our translation) the company said.

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Chris Udemans

Christopher Udemans is a Shanghai-based data and graphics reporter. He covers Chinese artificial intelligence, mobility, and cybersecurity. You can contact him at chrisudemans [at] technode [dot] com.