Considering that the subsidy will not be further cut, NEV sales is expected to remain stable in the near future.

 

On the one hand, the government hopes that through the gradual reduction of subsidies, China's new energy vehicle development can evolve from policy-led market into a new market-oriented stage. At this new stage, The cut in NEV subsidies would reshape NEV industry, speeding up the market competition and promoting the improvement of technological standards to global levels as domestic automakers have to make efforts to reduce their reliance on subsidies and focus more on their products and cost control. According to Miao Wei, the quality of new energy vehicle products has improved significantly, and the cost of power battery systems has fallen below 1 RMB/Wh, which is 85% lower than in 2009.

 

On the other hand, excessive pursuit of subsidies will cause some companies to ignore the pursuit of other technical parameters (safety issue, inconsistent product quality, etc.) The market competition got more and more fierce and companies went into bankruptcy due to the rupture of capital chain, inappropriate technology roadmap or other reasons.

 

 

In Wan Gang's speech, he suggested to promote the development of hydrogen energy and fuel cell industry from six aspects:

 

 

 

 

While generating renewable electricity is an important way to reduce carbon dioxide, one major drawback of these energy sources is their variability: the wind tends to blow intermittently, and solar power is only available during the daytime. Also, curtailment of renewable energy happens due to the imbalance between power supply and demand, difficulty in grid construction, operation and other factors, which reduced the expected output of generators that can be otherwise produced given available resources.

 

Under these circumstances, hydrogen are regarded as promising energy carrier for renewables: high energy density, emission-free, etc. and are thus essential for a better energy management. Excess electricity can be stored in form of hydrogen, and it can be transported and consumed via fuel cell power generation whenever and wherever it is needed.

 

While most of our other attentions have been put on the applications in the transportation field, namely, passenger vehicles, buses, heavy trucks, and special vehicles, hydrogen energy and fuel cells can actually be applied in much broader scope. For example, we have more than 100 communication base stations in Shanghai of which the backup power is provided by fuel cells. Fuel cells can also serve as power source for underwater transportation, emergency use in hospitals, etc. Therefore, the role of hydrogen energy development should be considered from the perspective of national energy strategy.

 

 

Just as the implementation of the "ten cities, one thousand new energy vehicles” in 2009 to develop new energy electric vehicles, hydrogen and fuel cell vehicles are as well in a very early development stage. Much concerns need to be tackled before scaling up. The core of basic research of fuel cell and hydrogen energy, for example, is seldomly derived by our own technology. The basic research capabilities are highly wanted for a more sustainable industry environment.

 

For another, lack of standards also poses barriers for the scale-up of hydrogen application. Since there hasn’t been standards formulated for hydrogen liquification, long-distance transportation of liquified hydrogen is still an issue. However, long-distance transportation is inevitable now that the origin of liquified hydrogen are often distant (with the generation of renewable energy).

 

In addition, being dangerous chemical, the construction of hydrogen refueling stations is subject to restrictions. Currently, they can only be constructed inside chemical industry parks, which are mostly located outside the city. To further promote the large-scale application of fuel cell or hydrogen technology, convenient access to such supporting facilities as refueling stations is very important. Relevant technical requirements need to be standardized before these facilities go closer to potential end consumers.

 

 

Although the fuel cell vehicle subsidy policy was supposed to announce separately when the latest subsidy policy was introduced in March 2019, the new subsidy policy for fuel cell vehicles was not released until now.

 

Positive signals can still be inferred from Wan Gang’s speech that hydrogen industry is still put in a strategic high level and that basic research capabilities are very wanted for a more sustainable industry environment.

 

Apart from research and development capabilities, factors such as hydrogen supply and the development of the hydrogen energy industry are essential for the large-scale development of fuel cell vehicles. Development of fuel cell and hydrogen energy in demonstration district with abundant hydrogen resource, relevant industrial partners as well as governmental fiscal support can be regarded as a smart move.

 

Although the national-level subsidy policies for hydrogen energy have not yet been issued, local government can still continue supporting its development. According to the latest subsidy policy, local government subsidy for new energy vehicles other than fuel cell vehicles will be cancelled after the transition period.

 

Another reason why local government are generally willing to support the hydrogen energy industry is often involved along the value chain and interacted with other stakeholders such as hydrogen production, storage, transport, and application. The development of hydrogen energy is therefore significant in driving the local economy.