China forecasts 800,000 green vehicle sales in 2017: state media

BEIJING (Reuters) - China forecasts more than 800,000 green energy vehicle will be sold in the country this year, an increase of at least 58 percent from 2016, state media reported on Thursday, despite the central government easing up on policy supports.

China has aggressively promoted plug-in electric vehicles, including spending billions of dollars in subsidies, to curb urban air pollution and help the domestic auto industry establish itself at the forefront of the technology.

The central government had promoted the sales of green cars for years before sales began to boom in 2015, although it eventually hopes the segment will be driven by market demand. It has reduced subsidies for the vehicles by 20 percent this year on a path toward eliminating the payouts entirely by the end of the decade.

Xu Yanhua, a vice secretary for the government-backed China Association of Automobile Manufacturers (CAAM), told Economic Information Daily that passenger cars would increasingly drive the market for plug-in vehicles and are expected to account for more than 70 percent of demand in 2017.

“In 2017, demand for long-range pure electric car will rise further, charging facilities will continue to maintain rapid growth momentum, and following an expansion in scale, manufacturing costs will also be further reduced,” Xu told the state-run publication.

Last year, China recorded sales of 507,000 battery electric and plug-in hybrid vehicles, growing more than 50 percent but missing the original forecast of 700,000 vehicles due to uncertainty over policy supports, according to CAAM.

Reporting by Jake Spring and Beijing newsroom; Editing by Christian Schmollinger