AsianFin -- China’s automakers Chery and BYD may be required to repay government subsidies after an official audit revealed they improperly claimed a combined 353.5 million yuan ($53 million) in incentives for eco-friendly vehicles sold between 2016 and 2020.

According to documents released last month by the Ministry of Industry and Information Technology (MIIT), the two companies accounted for nearly 60% of the total improper claims uncovered in the review. The audit found that subsidies were incorrectly granted for 21,725 vehicles, totaling 864.9 million yuan ($121 million).

Chery had 7,663 vehicles disqualified, while BYD had 4,973. Although the audit did not specify penalties or repayment requirements, Chinese authorities have previously stated that companies must return subsidies for vehicles that fail to meet eligibility standards, such as mileage thresholds.

The findings come as Beijing tightens oversight of its longstanding subsidy programs for new energy vehicles, aiming to curb fraud and improve the sector's sustainability.