China can soon cancel the tax exemption for the purchase of electric vehicles

China can soon cancel the tax exemption for the purchase of electric vehicles

According to some Chinese media, sales of cars on new sources of energy, especially electric and hybrid cars, are growing in the country at such a rate that the authorities have decided to cancel the car allowance, as reported by the Digitimes portal.

According to the publication, in 2022 the Chinese government cut subsidies for the purchase of passenger cars from new energy sources by 30% compared to 2021, and the full subsidy will cease on 31 December 2022.

And in the future, the tax-free purchase of cars will be abolished, and now there is no need to pay a 10% tax on new car sources, and the tax-free car regime on new energy sources began to be introduced in Heaven in 2014, after which it was extended in 2017 and 2020. At the end of July, the Chinese government decided to reschedule the deadline again, but did not specify the time frame.

According to the representative of the Chinese Passenger Car Association, tax incentives for new types of transport should end at the end of 2022 or early 2023, when new energy sources will account for 35 per cent of new car sales. Since sales of new cars with VVCs are declining, tax losses will have to be offset by vehicle taxes on new energy sources; however, there are concerns that the elimination of subsidies and the return of 10 per cent of the tax could affect the desire to buy cars without classic internal combustion engines, especially with the rapid price increase.

Another problem is the lack of charging stations. According to Digitimes Research, in China, one charging "column" takes six cars. This ratio is much better than in Europe, but it's still too small to provide motorists with a comfortable charging infrastructure.