China on Wednesday unveiled details of the latest measures in promoting high-quality development of its new energy vehicles (NEV) industry, including the introduction of big tax breaks, seen as a positive boost for the sector.
Officials announced during a State Council Information Office press conference a policy package of purchase tax reductions to help boost sales of NEVs over the next four years.
NEVs purchased in 2024 and 2025 will be exempted from the purchase tax of up to 30,000 yuan per vehicle, and those purchased in 2026 and 2027 will be exempted from the purchase tax by half, said Vice Finance Minister Xu Hongcai.
Total tax breaks from these are expected to amount to about 520 billion yuan ($72.3 billion), Xu said.
Xu said that the tax incentives can better support the high-quality development of the NEV industry. Tax policies must be accurate and effective, and the focus will not only be on boosting "quantity," but also on the improvement of "quality," he said.
According to Xu, the tax reduction and exemption policies are aimed at supporting and encouraging mass consumption, while preventing high-end luxury cars from taking up too much of these tax incentive resources.
Relevant government departments will jointly promote the high-quality growth of the industry by optimizing these policies, he added.
Wholesale data from the China Passenger Car Association show that the wholesale sales of NEVs stood at 673,000 units in May, a rise of 59.4 percent year on year and an 11.5 percent month-on-month increase. Since the beginning of 2023, the cumulative sales volume of NEVs has stood at 2.778 million units, an increase of 46.5 percent over last year.
Meanwhile, as China is pushing for the growth of NEV sector, the country is also increasing its efforts to recycle batteries used for electric vehicles and gradually developing advanced recycling technologies.
In 2022 alone, China recycled 102,000 tonnes of used NEV batteries, said Xin Guobin, vice minister at the Ministry of Industry and Information Technology. Xin noted that the pace of recycling has accelerated significantly, with 115,000 tonnes of used batteries being recycled from January to May this year.
In recent years, China has actively promoted the recycling of batteries, and the country will gradually improve its management measures for the recycling and utilization of NEV batteries in the future, Xin said.
Presently, the world's major vehicle-producing countries all have increased policy support to the automobile industry and multinational automobile giants have also increased investment into research and development, all of which have boosted the development of the NEV industry globally, he added.