China will extend its preferential tax policy for the purchase of new energy vehicles until it ends in 2027, according to industry officials. The tax incentive fully covers electric, hybrid and fuel cell vehicles.
New energy vehicles sold between 2024 and 2025 will be fully exempt from purchase tax, with each passenger vehicle sold enjoying up to 30,000 yuan (about $4,178.56) of tax exemption, according to a statement released by the Ministry of Finance, the State Administration of Taxation and the Ministry of Industry and Information Technology.
Vehicles in this category sold between 2026 and 2027 will only pay half the purchase tax, and each passenger car will enjoy about 15,000 yuan of tax exemption, the statement said.
The document details that the measure aims to support the development of the new energy vehicle sector and stimulate car consumption.
Preliminary estimates show that the policy will result in a total of 520 billion yuan in tax exemptions and reductions, Xu Hongcai, vice-minister of finance, said at a press conference on Wednesday.
