Chinese authorities have announced a comprehensive set of supporting policies aimed at fostering the quality development of new-energy vehicles (NEVs) while encouraging domestic brands to expand their presence overseas. These policies include substantial tax breaks totaling 520 billion yuan ($72.3 billion) and measures to facilitate the global expansion of Chinese NEV companies.
The current NEV purchase tax exemption policy in China has been extended until the end of 2027. Vice Minister of Finance Xu Hongcai revealed that the total tax breaks under this policy are estimated to amount to 520 billion yuan. According to Xu, NEVs purchased in 2024 and 2025 will be exempted from the purchase tax, which can reach up to 30,000 yuan per vehicle. The exemption will gradually decrease by half for purchases made in 2026 and 2027. This extension marks the fourth time the tax break has been prolonged since its initial introduction in 2014, with subsequent extensions in 2017, 2020, and 2022.
The extension of the purchase tax exemption policy is regarded as a medium-term support measure for the NEV industry. It is expected to not only stimulate consumer demand but also promote significant industrial upgrades, injecting momentum into the economy, noted Tian Yun, a veteran economist, in an interview with the Global Times. China’s NEV sector has shown robust growth amid the country’s energy transition and industry upgrading efforts. The government is determined to further boost the rapid momentum of the NEV industry.
China also plans to strengthen high-level open cooperation in the NEV field and support Chinese companies involved in the NEV industry to invest and establish factories abroad, according to Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology. Additionally, China will accelerate the development of standards, including power battery recycling requirements and industrial standards related to functional safety, network security, and operating systems.
The improved competitiveness of domestic NEV brands has prompted the introduction of supporting policies to facilitate their global expansion, noted Tian. Establishing industrial standards and promoting their internationalization are considered crucial steps for China to solidify its position in the NEV sector. These policies are expected to provide a significant boost to the NEV industry and contribute to its continued growth and development.
