China EV Stocks Soar on Reports of Tax Exemption Extension

Xpeng plans to release around 30 new products or revised models within three years. Photo: Reuters.

China electric vehicle (EV) stocks gained on Thursday, after state media reports that Beijing is considering extending tax exemptions.

Broadcaster CCTV said the State Council – China’s Cabinet – might extend exemptions from the 10% vehicle purchase tax. The exemption is due to expire this year.

Hong Kong-listed shares of Xpeng rose as much as 11% and Li Auto gained 10.8%, while BYD rose 6%. Shenzhen-listed Chongqing Chang’an Automobile rose 7.5%, while Great Wall Motors gained 6%.

The aim of the extended tax exemption would be “to support the consumption of new energy vehicles”, CCTV said in its report.

The State Council discussed a package of measures worth 200 billion.yuan ($29.8 billion) aimed at spurring car sales.

Other measures would promote used-car sales, the report said, and use the vehicle purchase tax revenues mainly for highway construction.

“Consumption is the main driving force of the economy, and it is an important driving force for the [economy] to return to the right track,” CCTV quoted the State Council as saying, adding that it vowed to “unleash the potential of automobile consumption”.

George Russell

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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.