China's New EV Incentives Expected by End of June

New policies subsidizing purchases of electric vehicles in China are expected to come out in the first half of this year, encouraging many automakers to boost research and development.

Since previous policies expired at the end of last year, China’s ministries of Finance, Science and Technology, and Industry and Information Technology, as well as the National Development and Reform Commission, have reached an agreement to extend subsidies for electric vehicle purchases for another three years and revamping the subsidies.

According to the draft document, the new subsidies will go into effect retroactively from January 1 of this year until at least the end of 2015. However, the exact roll out date has not yet been fixed, and the policies are still subject to final authorization by the State Council or China's cabinet.

"The new subsidies will be divided into 16 levels according to the amount of energy the vehicles can save," Miao Wei, minister of Industry and Information Technology said recently. Previously, subsidies for new-energy vehicles were based on the type of technology they used. Plug-in hybrid vehicles could receive subsidies as high as 50,000 yuan (approx. US$8,000), while subsidies for pure electrics could reach 60,000 yuan (approx. US$9,800).

As China has shown a tendency to support hybrid vehicles with lower energy consumption, automakers have enhanced research, development and popularization of such vehicles, especially full hybrid and strong hybrid products. Detailed provisions regarding subsidies for electric cars will likely be implemented before the end of June 2013, but provisions for hybrid vehicles may come out later as standards for the evaluation of hybrid vehicle energy consumption have yet to be created. This has postponed the conversion of the subsidies for such vehicles to a standard based on fuel savings, according to industry analysts.

In addition, the highly-anticipated technological innovation projects for the EV industry are underway at 25 companies. These carmakers are expected to be the pioneers during the development process of China’s EV sector.

Ling Tianjun, chief engineer of green vehicles at the Shanghai Automotive Industry Corporation (SAIC), one of China's four largest auto groups, said SAIC has started selling hybrid cars at lower prices with the help of subsidies totaling over 100,000 yuan (approx. US$16,000). The company’s plug-in hybrid Roewe 550 PHEV is also expected to hit the market within this year.

BYD, one of the better known Chinese brands thanks to a stake held by billionaire U.S. investor Warren Buffett, has launched the BYD Qin hybrid vehicle and its “Green Hybrid” technology. The company plans to apply the Green Hybrid technology to its gasoline-powered automobiles as soon as possible

Chery, one of China's largest private automakers, has decided to spend more on electric vehicle research. But Duan Zhihui, Chery's chief hybrid vehicle engineer, said the three-year time limit for the new subsidies may cause auto companies to rush their research and development in order to avoid missing the opportunity to receive the subsidies.

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Oil falls below $85 as expected Bernanke speech

Singapore - on light oil prices under $85 a barrel Friday in Asia as a political speech expected investors later in the day by Federal Reserve Chairman Ben Bernanke.

Benchmark oil for October delivery was 39 cents to $84.91 in the late afternoon local time Singapore in electronic trading on the New York Mercantile Exchange. Crude oil rose to finish 14 cents to $85.30 on Thursday.

Brent crude for October delivery rose 8 cents to $110.70 on the ICE Futures Exchange in London.

Oil has most of this week in the close to $85 traded as investors speculated whether Bernanke give monetary stimulus measures in favour of impetus and growth in a speech from Jackson Hole, Wyoming will announce. Analysts expect that oil would jump if Bernanke, that the Fed plans bond purchases signaled a more round Treasury, known as quantitative easing.

"No evidence of currency again relieve a significant sell-off of a wide swatch of the financial and goods could prompt arenas," said Knight Bush energy consultants and employees in a report.

Traders are considered also possible changes on second quarter us gross domestic product and the most recent data in the consumer mood, be.

Hurricane Irene could push oil prices higher, if it bothers refineries in Delaware, New Jersey, Pennsylvania and Virginia, producing nearly 8 percent of the U.S.-gasoline and diesel fuel.

Irene is expected to order a wide range of North Carolina after Canada to influence with floods and winds up as high as 120 miles (190 km) an hour. The storm destroyed hundreds of houses on small islands of the Bahamas Thursday, and some meteorologists the worst hurricane that could be taken in the North-East of the United States in 50 years think Irene.

In other NYMEX trade for October contracts fuel oil increased by 0.4% to $2.99 per gallon and gasoline futures dropped 0.6% to $2.80 per gallon. Natural gas for September delivery added 0.3 percent to $3.93 per 1,000 cubic metres.

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