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China May Extend EV Tax Exemptions As Sales Dwindle

China May Extend EV Tax Exemptions As Sales Dwindle

China is reportedly mulling more tax breaks for electric vehicles, just months after it was widely thought that Beijing would be phasing out subsidies for EVs. 

The news came as Chinese state television “reported that the government may extend tax exemptions on electric-car purchases in a bid to boost the auto sector,” Bloomberg reported in a wrap up on Thursday. 

The government is reportedly considering extending exemptions by roughly 200 billion yuan ($30 billion), the report says. The consideration was discussed during a State Council meeting chaired by Premier Li Keqiang, Bloomberg wrote. 

Recall, just 5 days ago we reported that Shanghai City was going to be subsidizing the purchase of pure electric vehicles with 10,000 yuan per unit incentives, beginning in June and ending at the end of 2022, the local government said.

“Consumers whose vehicles have been sold or scrapped will receive the subsidy, if they purchase a new pure electric vehicle from dealers or stores registered in Shanghai,” Bloomberg wrote in a wrap up last week. 

Also last week we had pointed out that Tesla’s Shanghai plant was back up and running at full capacity, and that the extent of the electric vehicle market’s success this year will continue to rely on whether or not Beijing embraces subsidies. 

The country has been mulling whether or not to extend EV subsidies after announcing last year that it was going to conclude them in 2023. Since then, Beijing has been re-thinking the idea amidst slowing demand for autos. About two weeks ago we reported that Chinese auto sales were down 17% year over year. 

It looks as though Beijing has finally caved…

Tyler Durden
Fri, 06/24/2022 – 06:55

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