China’s Green Car Scandal Just Got Bigger

(Shutterstock/Roman Seliutin)

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Andrew Follett Energy and Science Reporter
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The Chinese government is accusing more than 20 car companies of illegally taking green car subsidies, according to state media reports.

In one such case, China will revoke the production licenses of the green car company Suzhou Gemsea Coach Manufacturing, an entirely fake company, for fraudulently reporting that it produced 3,700 electric vehicles last year only one month before subsidies were reduced. State media agents and inspectors examined the company and found it was actually operating out of a shed and clearly had not produced that number of vehicles, according to state-run China Central Television.

China’s government also plans to issue stiff fines to five other car companies including Nissan and Hyundai, which allegedly stole $150 million each year in subsidies.

“This is a major blow to the industry and also has a large impact on the country’s policy enforcement,” Xu Yanhua, a vice secretary for the China Association of Automobile Manufacturers, told Reuters.

China spends $4.5 billion on green car subsidies each year to help increase the sales of electric and plug-in hybrid cars. The subsidies caused green car production to more than quadruple last year to 331,000 vehicles. The subsidies were intended to help sell over 700,000 vehicles annually.  China spent $2.3 billion subsidizing electric and hybrid vehicle makers in the years following 2009, according to reports.

The country spent more than $80 billion building new green energy sources in 2014 alone, while the U.S. spent a “mere” $34 billion.

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