China is considering extending the tax exemption for NEVs priced below 300,000 yuan for another four years to spur consumer demand, Bloomberg reported.
(Image credit: CnEVPost)
China is considering extending the tax holiday for some NEVs for another four years, the latest report said, adding that the policy was originally set to expire at the end of this year.
China's State Council is considering extending tax exemption for some clean cars for another four years as the government seeks to spur consumer demand for new energy vehicles (NEVs), a Bloomberg report today said, citing people familiar with the matter.
China's chief administrative body will meet Friday to discuss a series of policy measures aimed at boosting economic development, the report said.
One of those measures may be extending the purchase tax break for electric and plug-in hybrid vehicles that cost less than RMB 300,000 yuan ($42,510), one of the people said, according to the Bloomberg report.
To support the development of fuel-efficient vehicles, China first began exempting NEVs from purchase tax in 2014, allowing most consumers who buy such models to save about RMB 10,000 relative to those who buy conventional fuel vehicles.
The policy originally expired at the end of 2017, but was extended until the end of 2020, and in March 2020, China renewed the policy until the end of 2022.
On September 26, 2022, several Chinese government departments said in an official announcement that the purchase tax exemption for NEVs will continue until the end of 2023.
As of November 10, China had exempted RMB 68.6 billion in purchase tax on NEVs in 2022, up 101.2 percent year-on-year, Wang Daoshu, deputy head of the State Taxation Administration, said in a November 16 news release last year.
China also previously provided subsidies for the purchase of NEVs, but they were not renewed when they expired at the end of last year.
The NEV purchase subsidies for the past few years have only applied to models priced below RMB 300,000, but battery swap-enabled models like Nio's are not subject to the price limit.
Growth in China's NEV industry slowed significantly early this year after the subsidy policy was withdrawn.
From January to April, retail sales of NEVs in China were 1,841,079 units, up 36.16 percent year-on-year, according to the China Passenger Car Association (CPCA). For comparison, the growth rate for the same period last year was 124.23 percent.
($1 = RMB 7.0571)
China extends NEV purchase tax exemption until end of 2023 in official announcement
Related posts on CnEVPost
