As hydrogen-powered carmakers expect Chinese authorities to announce an increase in subsidies for this form of transportation by the end of the month, leading companies in the industry have announced the launch of their projected production, Reuters reported.
The largest participant in the automotive market in the country – SAIC Motor, announced that within the next almost five years sales of hydrogen cars will reach 10 thousand units per year, and Beiqi Foton Motor – that it will sell 15 thousand such cars. In the case of the latter, this will be a drastic growth rate, as its forecast for 2023 is to sell about 4,000 cars.
This is not the first time that expectations for production and sales have followed Beijing’s subsidies, making policies a problem for the entire automotive industry, something the authorities themselves noted a year ago.
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“Some carmakers depend too much on subsidies and therefore find it difficult to compete in global markets,” China’s finance ministry said in October 2019. “Despite financial support, Chinese hydrogen cell businesses have not made breakthroughs and no rapid development is observed. “
Thus, in the autumn of last year, manufacturers faced a contraction in state financial support, despite Beijing’s plan to have “millions” of hydrogen cars on the country’s streets by 2030. Now, however, the government is likely to increase subsidies after earlier during the month it was announced that a new package of measures is being prepared to finance the industry.
There will be a difference in funding compared to existing subsidies that subsidize sales – ie. lower the price for end users with the idea of making hydrogen-powered vehicles and electric cars more easily accessible. However, in the new package, funding is expected to come against building a more sustainable supply chain and business model from carmakers.
Hyundai will aim to produce more than 100,000 hydrogen cells by 2024.
The company has yet to announce the location of its new plant
In addition to local companies, some global players have already announced they will enter the Chinese hydrogen car market. Among them so far are Toyota and Hyundai.
There are currently about 7,000 hydrogen vehicles in China, making them the smallest segment of the automotive market. Even electric cars are significantly more – over 4 million, including both all-electric and hybrid vehicles.