After wavering for years between various technologies for alternative energy vehicles, Beijing has finally cast its vote. Earlier this month, it announced a pilot program to subsidize the sale of plug-ins and EVs.

That's not a bad thing. Some action is better than no action. 

By offering a maximum subsidy of 50,000 yuan ($7,321) for plug-in vehicles and 60,000 yuan ($8,785) for pure electric vehicles, the government will certainly encourage the purchase of these vehicles.

But the subsidy has two major shortcomings. 

1) The program is designed to funnel subsidies to six favored automakers.

It smacks of favoritism when the government decides who can get the subsidy and who cannot.

At present, only five domestic cities -- Shanghai, Changchun, Shenzhen, Hangzhou and Hefei – will participate in the pilot subsidy program. 

Beijing has not explained why it chose the five cities. But it is widely believed that the government did so to restrict the subsidy to the six automakers based in these cities.

Those favored automakers are Shanghai Automotive Industry Corp., China FAW Group Corp., BYD Auto Co., Zhejiang Geely Holding Group Co. and Zoyte Holding Group Co., and Chery Automobile Co.

2) The subsidy is likely to be misused.

Under the existing program, the government will give the subsidy directly to automakers, who will then deduct it from the vehicle's price. 

With such an arrangement, there is no guarantee that an automaker will pass the entire subsidy along to the customer.

Automobile manufacturing is a highly competitive industry. Government favoritism can prop up an automaker for awhile, but cannot make it more competitive in the long run.

Now that it has set its strategy for alternative-energy vehicles, Beijing should let all automakers qualify for the sales subsidies. And the government should distribute those subsidies directly to consumers.

That is the only way to make sure that the money is well spent.