New Exemption Set To Boost Sales Of Electric Cars In China

The 10% purchase tax no longer applies to motorists in China who buy an electric car. The nation’s Ministry for Industry and Information Technology recently confirmed to the world that this change had come into effect on 1 September. The announcement was actually made in July as China tries to improve its environmental protection policies.

electric cars in china

According to Totally Electric Cars, China is “looking to reduce its dependence on fossil fuels while cutting air pollution”. The same website also says the Chinese Government is keen to help the country’s EV industry and hopes the tax exemption helps increase demand for EVs produced in China.

Limited Time Only
It is only possible to benefit from the exemption if you purchase one of the Government approved vehicles however. The first 17 vehicle types to be included in the exemption are all made by Chinese companies despite original plans to include EVs from different manufacturers around the world.

Additionally, the exemption is not permanent; it will be lifted in 2017 so Chinese motorists are advised to act before then if they wish to save money. The program’s success dictates whether or not more electric cars will be added to the exemption list.

It comes as no surprise to learn that China is the largest EV market in the world given its huge population. The Chinese Government has set a target of having 5 million EVs on the road by 2020. It was originally hoped that there would be 500,000 EVs on the road by the end of next year but as electric car sales have slowed, this target seems fanciful.

There have been electric car subsidies in place in China since 2010. For example, you could save up to $18,500 by purchasing an EV in Beijing. Additionally, public institutions have been forced to use an increased number of electric cars. In future, there may be a tax placed on gasoline in order to persuade more people to make the change from traditional to electric cars. For the moment, the Chinese Government has a lot of work to do in order to fulfil its long-term objectives.