China has accused more than 20 additional car makers, including Nissan and Hyundai, of breaking rules on green car subsidies, according to a state media report, widening a scandal over a $4.5 billion annual payout program.
On Thursday, China’s Ministry of Finance punished at least five car makers, accusing them of cheating its program to subsidize electric and plug-in hybrid vehicles, receiving roughly 1 billion yuan ($150 million) in illegal subsidies.
“This is a major blow to the industry and also has a large impact on the country’s policy enforcement,” Xu Yanhua, a vice secretary for the China Association of Automobile Manufacturers told a news briefing.
The ministry said it would revoke the production license of Suzhou Gemsea Coach Manufacturing, while the other four firms would be fined. The companies named included a subsidiary of Chery Holding [CHERY.UL], owner of the seventh most popular Chinese passenger car brand.
The scandal has cast a pall over China’s drive to use subsidies to combat heavy pollution which affects large swathes of the country. This drive helped sales of electric and plug-in hybrids more than quadruple last year to 331,000 vehicles.
China’s official Securities Daily newspaper reported on Friday that there was a list of an additional 20 companies who were also found to have committed violations.
These include Japan’s Nissan, South Korea’s Hyundai, Geely, Anhui Jianghuai Automobile (JAC Motor) and a subsidiary of BYD.
“As we understand the government investigation is proceeding, we cannot comment on this issue at this stage,” a Hyundai spokeswoman said in a written statement.
Nissan did not respond to requests for comment. Geely declined to comment