China to Continue Implementing Tax Breaks for EVs

More than 90 percent of China's existing new energy vehicle (NEV) models will continue to receive tax breaks on purchases under new technical requirements unveiled on Dec 11, China's industry ministry said. The technical requirements for NEV eligibility for purchase tax exemptions from 2024 state that pure electric cars should have a driving range of at least 200 kilometers per charge while plug-in hybrid cars should be able to run at least 43 kilometers on electricity, the Ministry of Industry and Information Technology said in a statement.

The new regulations require a range attenuation rate of no higher than 35 percent under low temperatures for electric vehicles (EVs) and allow EVs capable of battery swapping to be eligible for tax breaks.

In June, China unveiled a 520 billion yuan ($72.41 billion)package of tax breaks over four years for EVs and other green cars, its biggest yet for the industry as it seeks to boost auto sales growth.

Weakening sales growth in the world's biggest auto market has raised concern over China's economic growth, and while financial support was widely expected after an earlier government pledge to promote the industry, shares in major automakers jumped after the details were released.

New energy vehicles (NEVs) purchased in 2024 and 2025 will be exempted from purchase tax of as much as 30,000 yuan ($4,170) per vehicle. The exemption will be halved and capped at 15,000 yuan for purchases made in 2026 and 2027, the Ministry of Finance said in a statement.