China Moves to Prune Its Lineup of EV Makers

China’s central government is launching a new certification procedure for electric car makers in a bid to weed out startups that lack relevant technical prowess or research capabilities, the Financial Times reports.

About 200 companies have rushed into the Chinese market for all-electric and plug-in hybrid vehicles in the past two years after Beijing began offering generous subsidies to hike sales of such vehicles. In some cases, the incentives equaled 60% of the price of the car itself, FT notes.

The program helped quintuple sales of so-called new-energy vehicles to 507,000 by 2016, making China the world's largest market for such vehicles.

But some participants collected payments without actually producing NEVs. That prompted a government crackdown to recover 2.3 billion yen ($337 million) in funds paid to cheater manufacturers.

Now Beijing has begun reducing subsidies and says it will phase them out entirely by 2020. FT says the government also will use the new certification process to push smaller NEV companies to drop out or partner with more established carmakers.