Chery rejects audit’s claim it wrongly declared green-car subsidies

Chinese automaker Chery has denied an industry-ministry audit that disqualified more than $53 million in state incentives for thousands of its electric and hybrid vehicles, insisting it followed official guidance and committed no fraud.

Chery said on Saturday it had “truthfully reported” difficulties obtaining end-sale certificates for cars sold more than five years ago and had applied for the incentives only after regulators advised it to submit the paperwork for verification.

China’s Ministry of Industry and Information Technology (MIIT) last month ruled that 21,725 vehicles declared by several manufacturers did not qualify for new-energy subsidies between 2016 and 2020 because of missing documents or unmet mileage targets. The decision covered 7,663 Chery vehicles and 14,062 produced by rivals including BYD, disqualifying funding worth about $53 million in total—almost 60 % of all contested claims.

MIIT did not allege fraud, nor did it outline penalties, although Beijing has previously required companies to repay subsidies when mileage rules are breached. Chery said the audit involved applications that had not yet been paid, so no reimbursement would be necessary.

BYD, China’s largest electric-vehicle maker, did not respond to Reuters questions.

Beijing’s subsidy scheme, which ran until 2022, helped make China the world’s biggest electric-car market; the country accounted for more than 60 % of global EV sales last year, according to the International Energy Agency. Regulators have since stepped up compliance checks amid concerns about abuse of public funds.

Industry analysts said the latest findings could tighten scrutiny of manufacturers’ reporting but were unlikely to dent consumer demand in a market where battery-powered cars now make up more than one in three new registrations.

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