No timetable for scrapping taxes on buying new-energy vehicles

Shanghai, May 20 (Gasgoo.com) Earlier this month it was reported that the Chinese government would issue a new policy later this year to scrap purchase taxes on new-energy vehicles in a bid to boost a more eco-friendly and energy-efficiency auto industry in the country. But the state taxation authorities recently said that the preferential policy is still in the pipeline and there's no timetable for its issue and implementation.

Seven new-energy vehicle models are heading for mass production in the next one or two months, according to the latest list of auto manufacturers and models approved by China’s top industry regulator for production. The seven models include Shanghai VW's fuel cell Passat, Shanghai GM's SGM7240, FAW's CA7130, and other four hybrid buses produced by Dongfeng Motor, Beiqi Foton, and Changan Auto.

The fuel cell Passat is already set to be the official car for the Beijing Olympics opening ceremony, and the SGM7240 may be the hybrid Lacrosse. Both the Prius and the Civic Hybrid consume only 4.7 liters fuel per hundred kilometers, compared with a conventional 1.8-liter Civic, which consumes at least 5.8 liters fuel per hundred kilometers. But most customers are held back by high prices. The Prius' standard version is now sold at 259,800 yuan ($37,220) in Guangzhou and the Civic Hybrid is about the same.

If the policy on tax exemption on buying new-energy vehicles is implemented, the buyer of a hybrid car can save at least 10,000 yuan ($1,430). In addition the purchase tax exemption, another important reason for the customers to buy the hybrid cars is that these new-energy vehicles can save at least 30% of the fuel, a feature that can also boost the vehicle's performance and comfort. However, most of the young customers are more willing to buy imported hybrid cars.

The electric vehicle will also be supported by this favorable policy soon after the related auto engineering and marketing get ready for its mass production. The all-electric vehicle is the currently best solution to achieving the zero-emission and zero-pollution targets, but a great number of power-recharging stations must be built before many electric cars run on the Chinese roads. This may be one of the reasons why the new policy will not be coming out soon.

Industry insiders also said that China's top regulators will implement this new preferential policy only after local carmakers are mature and competitive as foreign, especially Japanese, carmakers both in the technologies of making new-energy vehicles and in the market appeal. Nonetheless, as environmentally friendly development is high on the country's agenda, more and more new energy vehicles will come onto the roads after showing off at exhibitions.