NEV Purchase Tax to Resume in 2026 with 5% Rate and 15,000 Yuan Cap

Published: Sep 12, 2025 11:05 (GMT+8)

Save

[Tax on NEV Purchases to Be Reinstated in 2026, with a Minimum 5% Vehicle Purchase Tax] 2025 marks the final year of China's vehicle purchase tax exemption policy for new energy vehicles, with taxation to resume next year, albeit with continued incentives. According to the "Announcement on Extending and Optimizing the Policy for Reducing and Exempting Vehicle Purchase Tax on New Energy Vehicles" issued by the Ministry of Finance and other authorities in 2023, NEVs purchased between January 1, 2026, and December 31, 2027, will be subject to a 50% reduction in vehicle purchase tax, with the tax reduction for each passenger NEV not exceeding 15,000 yuan. This means that individuals and entities purchasing NEVs in 2026 and 2027 will resume paying vehicle purchase tax but will still enjoy a 50% tax reduction. The current vehicle purchase tax rate is 10%, so a 50% reduction for NEVs implies an effective tax rate of 5%. However, to prevent high-end luxury NEVs from consuming excessive vehicle purchase tax incentives, the Announcement sets a maximum limit on the tax reduction for NEVs over the next two years, capping the tax reduction per vehicle at 15,000 yuan.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

45 mins ago

[SMM Analysis] Cobalt Salts Halt Slide on Metal Rally, but Two-Plus Months of Inventory Looms: Can Sentiment Hold?

A cobalt metal futures rally lifted cobalt salt sentiment this week, with cobalt chloride and cobalt tetroxide prices stabilizing. Cathode producers showed more interest in locking in cobalt tetroxide orders, mostly as bottom-fishing, with limited pass-through to cobalt chloride. As of October, cobalt tetroxide inventory still covers over two months of demand. SMM sees only short-term support from sentiment amid persistent oversupply, and expects narrow consolidation.

45 mins ago

52 mins ago

[SMM Analysis] Cobalt Market Weekly Review: Cobalt Metal Leads Rebound as Sentiment Revives Amid Fundamental Constraints

52 mins ago

1 hour ago

[SMM Analysis] Refined Cobalt Rises While Cobalt Salt Halts Losses, but Over Two Months of Inventory Still Weighs Overhead: How Long Can Sentiment-Driven Prices Last?

This week, the rally in refined cobalt boosted sentiment in the cobalt salt market. Cobalt chloride and Co3O4 prices halted losses and stabilized. Cathode plants showed increased interest in locking in orders, but most of this was phased dip-buying, with limited transmission to upstream cobalt chloride. As of October, Co3O4 inventory still covered more than two months of demand. SMM believes sentiment can only provide short-term support, and the medium and long-term oversupply pattern remains unchanged. Cobalt salt prices are expected to move sideways in the short term.

1 hour ago