2 Min Read
* Regulator approves around 300 more models for subsidies
* Q2 approvals quadruple from previous quarter
* But gradual drop in subsidies is pressuring automaker profits
BEIJING, June 2 (Reuters) - China on Friday approved around 300 more green energy vehicle models to receive subsidies as part of a scheme that has rapidly boosted sales in the sector, with the pace of approvals accelerating from earlier in the year.
China is the world's largest market for green energy vehicles, with the government aggressively promoting the segment, including spending billions in subsidies, in a bid to fight intense urban air pollution.
Regulators had put the brakes on subsidies for new energy vehicles - defined as battery electric and plug-in hybrids - after discovering widespread cheating of the subsidy scheme last year, instituting stricter rules for qualifying and slowing approvals at the start of 2017.
That pace has since quickened with the latest 300 or so bringing total approvals for the second quarter to 1,396 models, compared to 386 receiving the green light in the first quarter, according to statements on the Ministry of Industry and Information Technology website.
But profits for new energy vehicle makers remain under pressure as the amount of subsidies each car is eligible to receive has decreased from last year, as the government seeks to gradually wean the industry off state support. It has also capped local subsidies that seek to match the national scheme.
An executive at Chinese automaker BYD Co Ltd predicted the company's first-half profits would fall because of the decline in subsidies, despite the company's sales volume for new energy vehicles improving as the year progresses, the state-owned Securities Times reported on Friday.
Reporting by Jake Spring; Editing by Joseph Radford