China scraps list of recommended auto battery suppliers: ministry

[June 24, 2019]  BEIJING/SEOUL (Reuters) - China has scrapped its list of recommended battery suppliers, the industry ministry said on Monday, a decision foreign companies said could open up the world's biggest market for electric vehicle batteries.

 Baojun E100 and E200 all-electric battery cars sit parked at a parking lot operated by General Motors Co and its local joint-venture partners in Liuzhou, Guangxi Zhuang Autonomous Region, China, February 28, 2019./File Photo

China, the world's largest new energy vehicle (NEV) market, has seen increased investment from South Korean battery makers LG Chem Ltd and Samsung SDI Co Ltd amid expectations for a gradual change in policy. [nL4N1Y829E]

The list, which did not include foreign firms when it was first published in 2015 to spur a domestic battery sector, was abolished on Friday as part of government management reforms, the ministry said on its website. It gave no further details.

Foreign makers complained the list discouraged competition and became linked to generous subsidies for recommended domestic companies such as Contemporary Amperex Technology (CATL) and BYD Co Ltd.

"We are relieved that these lists are going away, but we cannot be certain if the Chinese government is committed to abolish subsidies until they actually remove all subsidy policies," said an official at one foreign battery maker who declined to be named.

China has raised its standards for new energy vehicles (NEV) that qualify for subsidies and reduced the amount it is willing to provide to relevant companies, as it looks to wean the sector off government support. [nL3N21E1LO]

Growth in NEV sales has slowed in recent months after growing rapidly in past years. [nL4N23Q0FF]

(Reporting by Yilei Sun in Beijing, Heekyong Yang in Seoul and Brenda Goh in Shanghai; editing by Darren Schuettler)

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