China raises technology requirements for new energy vehicles to qualify for purchase tax reduction and exemption

Shanghai (Gasgoo)- In a joint announcement issued recently by China's Ministry of Industry and Information Technology ("MIIT"), Ministry of Finance, and State Administration of Taxation, significant changes to the technical requirements for tax reductions on new energy vehicles (NEVs) have been outlined. Effective January 1, 2024, vehicle models applying for inclusion in the "Catalog of NEV Models Eligible for Vehicle Purchase Tax Reduction and Exemption" issued by the MIIT must adhere to the specified technical requirements for NEV products.

ID.4 X; photo credit: SAIC Volkswagen

This announcement, according to a spokesperson from the MIIT, introduces moderate increases to existing technical benchmarks, incorporating new criteria such as low-temperature mileage decay. Specific requirements for models utilizing battery swapping technology have also been clarified. For these models, third-party testing reports meeting the standards outlined in GB/T 40032, "Safety Requirements for Electric Vehicle Battery Swap," are mandatory. Additionally, companies establishing their battery swapping stations must submit design blueprints and ownership documentation. Those opting for outsourcing battery swapping services need to provide proof of model compatibility, battery swapping station matching, and a mutually agreed-upon cooperation agreement.

A grace period is set from January 1, 2024, to May 31, 2024. During this period, vehicle models that were included in the "Catalog of NEV Models Exempt from Vehicle Purchase Tax" before December 31, 2023, and remain valid will automatically be transferred to the aforesaid "Catalog of NEV Models Eligible for Vehicle Purchase Tax Reduction and Exemption". Relevant models must promptly upload tax reduction labels and battery swapping mode indicators. Models using battery swapping and fuel cell technologies must supplement the necessary supporting documents in accordance with the Announcement.

Starting June 1, 2024, vehicle models failing to meet the technical requirements outlined in the Announcement will be removed from the Catalog of NEV Models Eligible for Vehicle Purchase Tax Reduction and Exemption.

The MIIT's spokesperson emphasized that the adjusted criteria in the announcement draw extensively from existing policies, such as NEV purchase subsidies, dual-credit systems, and the demonstration application of fuel cell vehicles. The announcement also provides a transitional period, aiming to positively impact the industry by stabilizing the automotive market, promoting technological advancement and energy-efficient consumption, and guiding companies to ensure the safety of their products.