An industry ministry audit found China’s Chery and BYD improperly claimed $53 million in eco-friendly vehicle subsidies between 2015-2020. 21,725 vehicles received $121 million in subsidies that did not meet mileage requirements. Repayment could worsen the industry’s struggles with overcapacity and profitability issues. China’s leaders aim to regulate pricing and phase out outdated production capacity. China’s subsidy program for new energy vehicles boosted sales, but audits are revealing improper claims.

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