BEIJING/SHANGHAI (Reuters) - China will not make significant cuts to subsidies for new energy vehicles (NEV) this year, signalling that its policy will remain relatively stable, state media quoted the country’s industry ministry as saying on Saturday.

FILE PHOTO: China's Minister of Industry and Information Technology Miao Wei speaks at the annual session of China Development Forum (CDF) 2018 at the Diaoyutai State Guesthouse in Beijing, China March 26, 2018. REUTERS/Jason Lee

Earlier, Miao Wei, China’s minister for industry and information technology (MIIT), told a forum that the country would not cut subsidies for new energy vehicles (NEV) again in July, an approach which was cheered by vehicle makers.

The government-backed Beijing News said an MIIT representative, in response to Miao’s statement, said that “this year’s NEV subsidy policy will remain relatively stable and there will not be significant cuts”.

Beijing has been slowly rolling back a generous 5-year subsidy programme for NEVs, which began in 2016, saying it plans to phase out subsidies after 2020, amid criticism that some firms have become overly reliant on the funds.

China’s monthly NEV sales dropped for the first time in two years in July as the subsidy cuts reached a new level, and have continued falling since.

“There was a subsidy cut on July 1 last year and everyone has been concerned about whether we will see more cuts this year,” Miao told the EV100 annual gathering of senior auto industry executives in Beijing.

“Today I can tell everyone, we will not cut it in July this year.”

Miao’s speech was the “best news”, He Xiaopeng, chief executive of EV startup XPeng Motors, told Reuters, adding that policy stability was crucial to the industry.

Miao also said NEV sales hit 163,000 units in December and full-year sales stood at 1.2 million NEVs, a drop from 1.3 million in 2018.

The China Association of Automobile Manufacturers will announce 2019 full-year sales figures on Monday. Last month, it said that NEV sales from January to November hit 1.04 million.

Automakers who stand to benefit include Tesla TSLA.O, which started making deliveries from its $2-billion Shanghai plant this month and secured NEV subsidies in December, Warren Buffett-backed Chinese electric car maker BYD 002594.SZ as well as aspiring Tesla-challenger Nio Inc NIO.N.