China has thus far waived new energy vehicle purchase taxes in an amount totaling RMB 68.6 billion ($9.7 billion) this year as of November 10, according to CnEVPost.
Deputy head of the State Taxation Administration Wang Daoshu stated today at a news conference that the figure increased by 101.2% over the previous year.
NEV sales in China
Notably, the total of NEVs sold in China as of November 10 was 4.48 million. Based on the invoice data on motor vehicle sales, Wang claimed it increased by 78.1% from a year ago.
NEV tax exemption
In hindsight, NEVs in China have been exempt from purchase taxes since 2014.
In contrast to buyers of traditional fuel vehicles, the tax exemption allowed most consumers who purchase such models to save roughly 10,000 yuan.
Although it was prolonged till the end of 2020, the policy’s initial expiration date was December 31, 2017. Interestingly, China extended the rule to December 31, 2022, last March 2020.
Furthermore, the policy was renewed till the end of 2023 in September of the current year.
NEV whole sales and retail sales
There were 5.015 million new energy passenger vehicle wholesale sales in China from January to October. Year over year, it increased by 110.8%.
On the other hand, the China Passenger Car Association released data earlier this month that showed that retail sales were 4.432 million units, jumping 107.5% from the previous year.
Passenger car 50% tax reduction
China also declared on May 31 that the purchase tax for passenger vehicles that complies with the following are eligible for its tax reduction by half:
- An engine capacity of 2.0 liters or less
- purchased between June 1 and December 31
- worth no more than RMB 300,000
Meanwhile, internal combustion engine car purchases in China were subject to a 10% purchase tax prior to the policy. According to Wang, China cut the purchase tax on qualifying ICE vehicles by RMB 39.8 billion between June and November 10.
China presently provides purchase incentives for NEVs and an exemption from the purchase tax. However, they are scheduled to expire at the end of 2022 as they have not been extended.
