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Nissan, Hyundai named in EV subsidy probe
Reuters | 2016/9/13

BEIJING -- China accused more than 20 additional carmakers, including Nissan Motor Co. and Hyundai Motor Co., of breaking rules on green-car subsidies, according to a state media report, widening a scandal over a $4.5 billion (30 billion yuan) annual payout program.

On Thursday, China's Ministry of Finance punished at least five carmakers for cheating to qualify for 1 billion yuan ($150 million) in EV subsidies. The ministry said it would revoke the production license of Suzhou Gemsea Coach Manufacturing, while the other four firms would be fined.

Meanwhile, China's official Securities Daily newspaper reports that there is a list of 20 additional companies that also committed violations. These include Nissan, Hyundai, Zhejiang Geely Holding Group, Anhui Jianghuai Automobile and a subsidiary of BYD Co.

Nissan did not immediately respond to requests for comment. A Hyundai spokeswoman said the company was "checking with the relevant internal departments." Geely declined to comment.

A BYD spokeswoman said the firm had not received any official notification from authorities. "Right now we do not have any idea where the suspected list is coming from," the spokeswoman said.

A spokesman for JAC Motor, which last week announced it was exploring a potential joint venture focused on EVs with Volkswagen Group, said the firm did not have an immediate comment.

The scandal has cast a pall over China's campaign to encourage sales of EVs to combat the country's severe air pollution. Last year, sales of EVs and plug-in hybrids quadrupled to 331,000 vehicles.

"This is a major blow to the industry and also has a large impact on the country's policy enforcement," said Xu Yanhua, a vice secretary for the China Association of Automobile Manufacturers, at a news briefing.

Without subsidies, it appears unlikely that China will achieve its sales target of 700,000 electric and plug-in hybrid cars this year, said Yale Zhang, managing director of consultancy Automotive Foresight. Only 245,000 such cars were sold in the first eight months, according to CAAM.

China spent 30 billion yuan last year in subsidies for such vehicles, although it is set to gradually phase out the payments by 2021.

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