China Exempts All EVs And Hybrids From 10% Sales Tax



With the goal of putting 500,000 “new energy” vehicles on its roads by the end of 2015, and 5 million on roads by 2020, China’s efforts to go green at ambitious to say the least. With just over 17,000 EVs and hybrids sold in 2013, the semi-communist country has a long, long way to go to meet that goal, though a new round of tax incentives could help tremendously.

Yesterday the Chinese government announced that all electric, hybrid, and fuel cell vehicles would be exempt from that 10% national sales tax beginning on September 17th and running through 2017. Most importantly, this includes both domestic and imported green cars, which could help China become the biggest market for green cars over the next decade.

The central government is currently building a portfolio of eligible vehicles, and the Tesla Model S will almost certainly be at the top of that list. This latest national tax incentive joins a growing list of local incentives from cities like Beijing, which are offering tax credits and free license plates (valued at $15,000 or more in some cases) to buyers of green cars.

There’s still the matter of the lack of charging infrastructure though, and while there are plans to lay down massive public charging networks all across China, as America learned, those networks require years to take hold on in the public consciousness.

With these generous subsidies compelling more Chinese consumers to look at green cars though, perhaps China really is on its way to becoming the world’s biggest market for electric cars.

About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he’s running, because he’s one of those crazy people who gets enjoyment from running insane distances.

  • egogg

    This is going to be HUGE for the EV market, in China, and for the rest of the world. Start to look for batteries in the $25/KWH range here in the next few years.

    • Ben Helton

      Is that a typo? $25 / KWh ???

      I think $275 / kwh would be a more fair goal. Still, at about 3 miles of range / KWH, to create a standard vehicle with 300+ mile range is inevitably going to still require a $25,000+ battery pack, on the optimistic side. Tesla is hitting folks for around $40k for an 85kw pack replacement (to give you an idea on current cost)

      • egogg

        Fat, fat fingers. $250/KWh.

  • Great Idea! Even More Vehicles on their Roads! Did I miss something – or did we not have congestion issues there that make North American Cities look Efficient – even at Rush hour?

    “The average Chinese motorist loses 9 days a year stuck in traffic”:

    Make Car-Pooling with EV’s a new program, not just an HOV Lane, but an HOV-EV Lane! To make that work – Pay People to drive an EV with more than three seats filled!

    [EV’s and other cars have seat load sensors that determine if to trigger an Air Bag, so the tech is already their for the car to record how many seats are filled with some weight, just use a PIR (Passive Infra-Red) sensor to see if it is a person!]

    China has the power to also say – Work 2 hours longer a day and work 1 day less per week, (4 x 10 instead of 5 x 8 = 40 hours, etc.), for many industries that are not direct retail, like manufacturing, this could be an element to reduce travel, and congestion. Just rotate which companies have their non-working day – to keep a steady reduction in traffic spread over the week. This also helps reduce employee travel costs, and reduce pollution inputs by at least 20% from those companies.

    HOV-EV Could be added to this – and such drivers could be paid more if they had more people traveling in their EV in the HOV lane, encouraging the ‘Work Taxi’ so to speak!

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