By CHEN Xiaotong
China has extended its tax policy for NEVs, securing benefits for new vehicles until 2027, with gradual reductions in incentives over time.
The exemption for each EV will be capped, and specific requirements for eligible vehicles are outlined.
The move comes as China's EV sector continues to thrive, with growth in production, sales, and exports. From January to May, both production and sales of EVs were close to 3 million units, both half as much again as this time last year. Exports hit 457,000 units, substantially better than the 180,000 seen in the corresponding period of 2021.
All EVs purchased between January 1, 2024, and December 31, 2025, will be exempt from purchase tax up to 30,000 yuan (US,200). For EVs purchased between January 1, 2026, and December 31, 2027, the tax will be halved and not exceed 15,000 yuan.
Eligible EVs are pure electric vehicles, plug-in hybrids (including extended-range vehicles), and some fuel-cell vehicles.
China has exempted NEVs from vehicle purchase tax since September 2014, extending the regime three times. An early June State Council executive meeting agreed to consolidate and expand EV development through the national industrial layout and tax policy.
In 2022, about 5.7 million EVs were exempted to the tune of 88 billion yuan, double the previous year’s tax giveaway. XU Hongcai, vice minister of finance, has stated that preliminary estimates indicate that the total amount from 2024 to 2027 will reach 520 billion yuan.
