The move is the latest in a series of steps to lift sales and production in the world’s biggest EV market. — Reuters
BEIJING: China extended tax breaks for consumers buying clean cars through 2027, estimated to be worth 520 billion yuan (US$72bil or RM335bil) in the coming four years, in an effort to bolster its flagging electric vehicle (EV) industry.
The move, announced at a briefing in Beijing yesterday, is the latest in a series of steps to lift sales and production in the world’s biggest EV market.
“Even though China has accomplished certain achievements in the new energy vehicle industry, the sector still has problems, including insufficient supply of critical technology and uneven development in the wider market,” said Xin Guobin, an official from the Industry and Information Technology Ministry.
“These need to be responded to.”
While new cars are generally subject to a 10% sales tax, it hasn’t applied to clean-energy vehicles since 2014 and the policy was recently extended through 2023.
Yesterday’s announcement pushes that date to the end of 2025 for clean cars priced under 300,000 yuan (US$41,700 or RM193,784) that don’t seat more than nine people. Cars priced under 150,000 yuan (RM96,892) will get further support through the end of 2027.
Shares in industry leaders initially shifted higher, but by lunchtime BYD Co was unchanged, giving up its earlier 1.5% gain.
Li Auto Inc added more than 3.6% in Hong Kong, while Nio Inc traded 5.8% higher.
Top battery maker Contemporary Amperex Technology Co Ltd erased earlier gains of as much as 1.1%.
Officials also reiterated their commitment to building more charging infrastructure and promoting EV sales.
They are particularly focused on rural areas, where EVs and plug-in hybrids account for as little as 4% of new car sales, compared to the national average of 25.6% last year.
China sold nearly 5.67 million clean cars last year, a 90% increase from a year earlier. — Bloomberg
