China on Wednesday extended tax breaks for the purchase of electric vehicles until 2027 in an effort to bolster domestic demand as the country faces a decline in sales as a result of the economy’s slowing growth.
In an effort to drive up weakening auto demand, the government has launched a 520 billion yuan ($72.3 billion) program to boost sales of electric vehicles (EVs) and other green autos over the next four years.
According to a statement released by the Ministry of Finance, buyers of new energy vehicles (NEVs) in China will be exempt from paying a purchase tax of up to 30,000 yuan per car in 2024 and 2025, with the amount of the exemption decreasing to 15,000 yuan in 2026 and 2027.
The move is an extension of the current policy that allows NEVs to remain purchase tax free until the end of 2023. NEVs include all-battery EVs, plug-in petrol-electric hybrids, and hydrogen fuel-cell vehicles.