Beijing to scrap purchase tax on new-energy vehicles

Want China Times, Staff Reporter 2014-07-11

A Tesla electric car on show in Taiyuan, Shanxi province, May 5, 2014.
(File photo/Xinhua)

A State Council meeting on Wednesday decided that purchase taxes should be waived on new-energy cars that are allowed to be sold in China.

Starting from September this year through the end of 2017, electric cars, plug-in hybrid electric cars and fuel cell electric vehicles will be exempt from taxes on purchase.

The State Council has requested related government agencies to publish the catalogue for the models that can enjoy the tax-free measure. In the meantime, the government will speed up its schedule for launching supporting measures, Shanghai's National Business Daily reported.

Dong Yang, secretary-general of the China Association of Automobile Manufacturers (CAAM), said he is positive about the rapid development of the new-energy vehicle sector.

However, Zhang Zhiyong, a senior market analyst in the auto sector, said the new measure is unlikely to substantially boost the development of new-energy cars because the current major obstacles are related to infrastructure in the sector, technology, security, customer service and quality. The new policies are intended to show the government's plan to develop the industry, Zhang said.

Some market observers stated that the measure will benefit development of not only car models, but also of their charging stations and batteries.

At present, the tax levied on the purchase of cars of all kinds is 8.5%. The large tax waiver for buying new energy vehicles will effectively reduce the cost for buyers, Dong said, adding however that the construction of charging equipment for electric vehicles should be the top priority.

CAAM statistics showed that China produced 20,692 new-energy cars during the first half of 2014 and sold 20,477, figures 2.3 and 2.2 times higher, respectively, compared with the same period a year ago.