China's latest efforts to extend the tax exemption policy for new energy vehicle purchases are expected to further stimulate consumer buying sentiment and inject strong impetus into the automobile market, industry experts said.
China will extend the exemption of purchase taxes on NEVs, which was originally scheduled to expire by the end of this year, to the end of 2023, according to a notice issued by the Ministry of Finance, the State Taxation Administration and the Ministry of Industry and Information Technology on Monday.
The NEVs include pure electric vehicles, plug-in hybrid electric vehicles and fuel-cell vehicles. The move is expected to bolster the development of the NEV industry and spur consumption of automobiles, said the notice.
The country first began exempting NEVs from purchase taxes in 2014, and this is the third time that the tax-exemption policy has been extended. The latest extension is expected to waive 100 billion yuan ($13.98 billion) in taxes.
China's NEVs segment has witnessed rapid growth this year. Retail sales of NEVs in China surged 111.2 percent year-on-year to 529,000 units in August, according to the China Passenger Car Association.
In the first eight months, retail sales of NEVs in China stood at 3.262 million units, skyrocketing 119.7 percent year-on-year, said the CPCA.