China continues NEV subsidies, car purchase tax exemption to spur car demands: MIIT’s minister

Shanghai (Gasgoo)- China will adopt multiple measures to further spur automobile demands, including continuing the implementation of the subsidies on new energy vehicle (NEV) purchases, the awards for building NEV charging facilities, and the exemption of vehicle and vessel purchase tax, Xiao Yaqing, minister of China's Ministry of Industry and Information Technology (MIIT) said on Feb. 28.

He added the MIIT will also carry out the programs for bringing NEVs, green intelligent home appliances and green building materials to the countryside, as part of efforts to boost  domestic consumption.

BYD Tang DM-i; photo credit: BYD

Subsidies for purchasing NEVs in China would be cut by another 30% in 2022, several Chinese central ministries announced on Dec. 31, 2021.

Following the subsidy decline, a number of automakers in China, such as Tesla, XPeng and BYD, have lifted the prices of some NEV products. However, the impact of price increase on NEV sales was limited as China still scores a 135.8% year-on-year surge in NEV sales in January, according to the data of the China Association of Automobile Manufacturers (CAAM).

China's authorities have also clarified that the governmental NEV subsidies in the country will be completely eliminated after Dec. 31, 2022. Thus, 2022 will be the last year for the government-paid EV incentive, which have been in place in China since 2010.