China announced a broad campaign on Tuesday in which 26 automakers will create incentives for people in rural China to buy electric cars, in an attempt to revive flagging car sales after a wave of coronavirus lockdowns hit the country’s economy. 

Why it matters: The move is Initiated by policymakers as part of a larger scheme to boost big-ticket purchases and battle the deepening economic fallout from the Covid-19 pandemic.

Details: A total of 26 auto firms, including BYD, state-owned SAIC, Volvo’s parent company Geely, and GAC’s EV subsidiary Aion, are joining a series of online promotional campaigns targeting car buyers in rural areas and lower-tier cities in at least 11 Chinese provinces.

  • Automakers will be encouraged to work on sales incentive programs in collaboration with e-commerce platforms to generate offline car sales from May to December, according to a statement (in Chinese) jointly issued by four government agencies on May 16 and released to the public on May 31.
  • The Ministry of Industry and Information Technology, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, and the National Energy Administration jointly launched the campaign. They will also team up with provincial governments to push supportive measures that will encourage more people to buy EVs, such as more investment in public charging infrastructure.
  • Other automakers participating include state-owned automakers Dongfeng and Changan, SAIC-GM-Wuling (a joint venture between General Motors, SAIC, and Wuling Motors), as well as WM Motor and Leapmotor. The China Association of Automobile Manufacturers (CAAM) is assigned to collaborate on the project.

Context: Beijing has pledged to mitigate the adverse effects of the Covid-19 outbreak on the auto industry, including cutting vehicle purchase taxes up to RMB 60 billion ($9 billion). In addition, multiple local governments have unveiled new cash subsidies and announced new vehicle quotas to stimulate car purchases.

  • In April, China’s new car sales fell 47.1% from March to 1.18 million units, with a 38.3% slump month-on-month in sales of new energy vehicles, including all-electrics, plug-in hybrids, and hydrogen cars, CAAM data showed (in Chinese).
  • Big automakers such as Tesla and SAIC, the latter of which has joint ventures with Volkswagen and General Motors, were forced to suspend operations at their factories in Shanghai throughout most of April as the city enforced a strict lockdown to stop the spread of Covid-19.

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen