China’s booming electric vehicle industry, a flagship for Beijing’s technology ambitions, has been rocked by scandal after five companies were caught collecting millions of dollars in subsidies for buses they never made. The affair of the phantom buses has prompted questions about whether it might disrupt the ruling Communist Party’s financial support to an industry it is spending heavily to promote. “Definitely, the government will keep a closer eye on this,” said Zeng. “I think it’s a good thing. All the money can be used more properly. Companies that are real and invested money in R-and-D will benefit.”

The Finance Ministry said last week four companies reported inflated manufacturing figures, while the fifth, Gemsea Bus Manufacturing Co. in the eastern city of Suzhou, made no electric buses at all. Gemsea collected 261 million yuan ($40 million) in public money.