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China sets max loan ratio for new energy car loans at 85%

[BEIJING] China's central bank and the country's banking regulator on Wednesday set the maximum loan ratio for purchasing new energy vehicles for self-use at 85 per cent.

The ratio for the purchase of new energy vehicles for commercial use is 75 per cent, said the notice jointly issued by the People's Bank of China and the China Banking Regulatory Commission and posted on the central bank's website.

The new rules stipulate a separate loan ratio for new energy vehicles for the first time, while keeping the ratio for the purchase of traditional combustion engine vehicles at 80 per cent and 70 per cent for self-use and commercial-use, respectively.

China has signalled a long-term aim to shift towards new-energy vehicles, but has also been phasing out subsidies, raising concerns from some automakers that consumer demand alone will not be enough to drive sales.

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The loan ratio for used car purchases was raised from 50 per cent to 70 per cent, the notice said, with the new rules going into effect on Jan 1 of next year.