China punishes green car makers in subsidies scam

BEIJING - China's Ministry of Finance on Thursday announced punishments for five new energy vehicle producers for illegally obtaining government subsidies, which involved a total of over 1 billion yuan ($149.2 million).

In the worst case, Suzhou Gemsea Coach Manufacturing was found to have fraudulently inflated their production and sales data in an attempt to gain subsidies worth over 261 million yuan, the finance ministry said.

The ministry decided to disqualify the carmaker from subsidies and revoke its production license.

The other four companies, including Higer Bus Company and Shenzhen Wuzhoulong Motors Group, were also denied future subsidies.

The disclosure came as the Chinese government has intensified efforts to encourage the use of new energy vehicles to upgrade the industry and ease pressure on the environment, including tax exemptions, subsidies for car purchases and the requirement of government organizations to buy more new energy cars.

Thanks to government incentives, the number of new energy cars sold in 2015 more than tripled year on year to 331,100, according to the China Association of Automobile Manufacturers.

An earlier guideline by the State Council said China will build more than 12,000 new charging stations before 2020 to fulfill the demands of over 5 million new energy vehicles..