(Yicai) Nov. 13 -- With China’s policy of exempting new energy vehicles from purchase tax set to be changed next year, automakers are offering to cover the charge for those buyers who place orders now.
More than 10 automakers have brought out subsidies, such as electric vehicle brands Xiaomi, Li Auto, and Nio, as well as Geely Auto-backed Zeekr and Lynk & Co.
Legacy carmakers have also launched subsidies to boost their NEV sales, including Chery Automobile, Changan Automobile, and GAC Group, as well as the local joint ventures of Audi and Buick.
The 10 percent purchase tax has been waived for NEVs since 2014 to support their adoption. But from Jan. 1 next year buyers will have to pay a 5 percent levy, with the maximum exemption per vehicle set at CNY15,000 (USD2,114).
Carmakers have responded by offering subsidies to cover the tax for those who place orders now, in case delays or longer delivery cycles mean the cars are not delivered until the new year.
Given the impending policy change, people are more willing to buy NEVs before the end of this year and automakers are trying to take advantage of this, Cui Dongshu, secretary-general of the China Passenger Car Association, told Yicai.
But these subsidies will probably only cover orders before the end of this year and are unlikely to continue further, Cui pointed out.
NEV sales jumped 20 percent last month from a year ago to 1.72 million, making up nearly 52 percent of total number of new vehicle sold and meaning they exceeded 50 percent for the first time, per the latest data from the China Association of Automobile Manufacturers.
Since October, automakers have been rushing to capitalize on consumer demand ahead of next year’s tax change, launching new models and accelerating production and delivery, Chen Shihua, deputy secretary-general of the CAAM, said at a monthly press conference.
The auto industry’s self-regulation has also been advancing steadily, Chen said, allowing the car market to maintain steady development momentum.
