ANHUI Jianghuai Automobile Co. has stopped producing an electric sport utility vehicle (SUV) equipped with Samsung SDI Co. batteries on concern it may be stuck with unsold stock if the model is disqualified from government subsidies because the South Korean supplier isn’t on a list of approved vendors.

    The Chinese carmaker will resume manufacturing the iEV6s sport utility vehicle, its most expensive electric model at 234,800 yuan (US$35,000) before subsidies, only after Samsung SDI makes it to the government’s approved list, according to Wang Fanglong, a Jianghuai Auto executive in charge of new energy vehicle research and development.

    “We are cautious about selling iEV6s because of the huge policy risks,” Wang said. “The policy may change any time.”

    China has used a combination of subsidies and directives to push local governments, automakers and consumers to embrace the use of electric vehicles, which are seen as a way to reduce air pollution while serving the strategic goal of cutting oil imports.

    State incentives are coming under increased scrutiny amid a probe into funding fraud and as the government weans companies from handouts to speed up improvements in technology.

    Samsung SDI and LG Chem Ltd. are among foreign battery makers that have not made the list of suppliers qualifying for subsidies, despite producing the power units in China.

    “Domestic carmakers have been favoring South Korean and Japanese makers because prices are lower and the batteries have better performance,” said Wang Liusheng, an auto analyst with China Merchants Securities Co. “To a certain extent, most of them are worried about the battery regulations.” (SD-Agencies)