China will extend the tax exemption on new energy vehicle purchases until the end of 2023. China extended the tax exemption on purchases of new energy vehicles worth a total of 100 billion yuan, state media Xinhua reported citing a cabinet meeting on Friday (19/8/2022), Reuters reported.
Earlier, citing Bloomberg on Thursday (23/6/2022), China considered extending the tax exemption on new energy vehicle purchases in a bid to boost spending in the auto sector, state television reported, citing a State Council meeting chaired by Premier Li Keqiang.
Supporting policies such as tax abolition aim to increase demand for new energy vehicles as well as stimulate the used car market, state media CCTV reported.
A government subsidy introduced in 2009 to help the electric vehicle industry has been withdrawn and will be phased out completely next year. The 10 percent electric vehicle purchase tax exemption will expire at the end of 2022.
China’s car sales have dwindled as the country battles the Covid-19 outbreak by implementing a strict lockdown policy that lowers the value of consumer spending.
Sales of passenger vehicles fell 17 percent in May from a year earlier. Not a single new car was sold in Shanghai in April due to the virus outbreak in the city.
China has said it will halve the purchase tax on low-emission passenger vehicles having no more than nine seats from June to December at 300,000 yuan or less.
