Electric Vehicles

China Looking to Extend EV and Car Tax Exemptions

 

China is looking to extend a tax exemption for new electric vehicles (EVs) as part of efforts to encourage car purchases, the Ministry of Commerce said on Thursday.

The ministry also unveiled measures to encourage trade-ins of older vehicles and support the second-hand market.

Last month, Beijing said it was in talks with Chinese EV makers about extending costly subsidies that were set to expire in 2022, aiming to keep a key market growing as the broader economy slows.

The moves come as the world’s second-biggest economy has slowed sharply – and automotive sales along with it – as the country attempts to recover from Covid-19 lockdowns imposed in Shanghai, Beijing and other cities.

 

 

Stimulus Packages To Boost Car Demand

Chinese central and local governments recently announced a series of automotive consumption stimulus packages to boost car demand, including a cut in the vehicle purchase tax to 5% from 10%, effective from June to December 2022.

The incremental tax exemptions cover a wider range of internal-combustion-engine vehicles (ICEVs) than the previous round of tax rebates in 2015-2017.

About 90% of ICEVs would be eligible for tax exemptions given the criteria of two-litre or below engine displacement and selling prices of less than 300,000 yuan.

Five out of seven Chinese cities with licence plate caps for ICEVs – Guangzhou, Shenzhen, Shanghai, Hangzhou and Tianjin – have in aggregate increased 2022 quotas by 165,000.

  • Reuters, with additional editing by George Russell

 

 

READ MORE:

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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