In comparison to the frequent policy adjustments at the start and mid-year, the new energy vehicle market has recently shown greater stability. After going through periods of fluctuating catalog listings, subsidies, market contraction, and suspensions, automakers are now starting to gain momentum. Among them, mainstream new energy models have shifted from plug-in hybrids to fully electric vehicles. From the sales data released by the China Association of Automobile Manufacturers (CAAM), it's clear that top-selling pure electric models like the BAIC EC series, JAC IEV series, and Zhidou D2 all fall within a 200 km range, with subsidy prices around 50,000 RMB.
According to industry sources, the 2018 subsidy policy for pure electric passenger cars will undergo significant changes. As part of the general trend of reduced subsidies, the government will adopt a "benefits-based and support-enhanced" approach. Vehicles with longer driving ranges, higher battery energy density, and lower power consumption will receive increased subsidies, while those falling short will see reductions. The reliance on subsidies alone will be phased out, marking a major shift in the new energy market this year.
The 300 km range is becoming a key benchmark. Vehicles with more than 300 km of battery life will qualify for higher subsidies, while those reaching 400 km will also benefit from additional incentives. On the other hand, models with less than 300 km of range will see significant cuts in subsidies, and the minimum required range will increase from 100 km to 150 km. This means that current popular models with shorter ranges may lose their competitive edge. With similar pricing, more consumers are likely to choose models offering over 300 km, pushing automakers to adjust their strategies toward longer-range options.
Battery technology is set to become a major challenge for new energy companies. Under the revised policy, there are stricter requirements for power batteries, raising the threshold from 90 Wh/kg to 105 Wh/kg. Only models with a battery density of 140 Wh/kg will qualify for a 1.1 times adjustment factor, while those between 105-120 Wh/kg will see their subsidies reduced to 0.5 times. Additionally, power consumption standards have been updated—only vehicles with actual power consumption below 65% of the required level will receive the 1.1 times adjustment factor, while those exceeding 90% will no longer be eligible.
As a result, in 2018, the trend in new energy vehicles is expected to favor models with over 300 km range, priced under 50,000 RMB, as well as those with high battery density and low power consumption. Many car manufacturers have already started launching models with extended range. For example, the Beiqi EU300, Tiggo 3Xe, Dongfeng Fengshen E70, and Geely Emgrand EV300 are among the popular choices with over 300 km of range. It’s safe to say that next year will be a big year for these models, as they continue to gain traction in the evolving market.
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