BYD and Chery Face Fines Over Electric Vehicle Subsidies

KatadataOTO – Two four-wheeled vehicle manufacturers from China, BYD and Chery, have recently been embroiled in a problem. They face the threat of having to repay the electric car subsidies they received in China.

Reporting from the Straits Times, Sunday (13/07), a regulatory audit found that BYD and Chery received electric car subsidies without meeting the required criteria.

The audit was conducted for the electric car subsidy program that ran from 2016 to 2020.

This has been going on for five years, specifically since 2016. According to authorities, the total subsidies received by both were 864 million yuan, or equivalent to Rp 1.91 trillion when converted to the rupiah exchange rate.

Photo : BYD

It was further explained that Chery registered 8,760 units of EVs (Electric Vehicles) and hybrid cars to obtain 240 million yuan (Rp 543.3 billion) in subsidies.

Meanwhile, BYD included 4,900 vehicle units with a government subsidy value of around 143 million yuan (Rp 343.7 billion).

Because of this fraud, both BYD and Chery seem to face fines or the obligation to return the subsidies. However, there is no clarity yet on the form of punishment the two manufacturers will receive.

Audit and Price War

The Chinese government conducted the audit for several reasons. One of them is to strengthen the security of the local automotive industry.