China Extends Tax Cut For Electric Vehicles
The Chinese government has confirmed the extension of the tax exemptions on purchase of New Energy Vehicles (all-electric or plug-in hybrids) that otherwise would have ended on December 31, 2017.
Incentives will be available for the next three years, through the end of 2020.
Lowering the effective price of NEVs by several thousand dollars is important to meet the requirements of 10% NEV credits in 2019.
Manufacturers were scrambling to delay the requirements from 2018 to 2019 and save the incentives, arguing that consumer demand will not be sufficient.
“The finance ministry said in a statement on Wednesday the tax exemption, which was set to expire at the end of this year, will run from Jan. 1, 2018 until Dec. 31, 2020 for electric, plug-in petrol-electric hybrid and fuel-cell powered vehicles.”
The second reason for the government bump is to help national brands to expand their NEVs business and be competitive with global brands in the future.