‘Sluggish’ consumer sentiment drives State Council to consider extending EV tax break
WHILE any substantial electric vehicle (EV) incentivisation scheme has yet to take hold in Australia, it is with interest that we look at how other countries – with far larger populations and more cars – are managing such programs in the face of slowing sales growth.
A report published by Bloomberg this week details how China is poised to deal with this very situation, the country set to extend incentives for EV purchases as part of broader efforts to revitalise what it describes as “sluggish” post-pandemic sales.
According to the report, the foundation for China’s economic recovery is not yet fully formed, the nation’s State Council reporting without further detail that it will “extend and optimise new-energy vehicle purchase tax exemptions”.
Those measures could see the current tax break for electric and plug-in hybrid vehicles priced below $US42,000 ($A63,150) continue for an additional four years. Currently, new energy vehicles are not subject to China’s 10 per cent purchase levy.
New energy vehicles (NEVs) that cost more than that amount are commonly classed as luxury vehicles in China, so any move that encourages people to purchase more affordable models is seen as one that will help boost the country’s NEV adoption rate and further its goal of reaching net zero emissions by 2060.
It is hoped that the continuation of the incentive scheme will help improve China’s slowing new vehicle sales market. Bloomberg reports that Chinese new-car deliveries slowed in the first four months of this year, declining 1.4 per cent over the same period in 2022.
EV and PHEV uptake is reportedly 92 per cent slower than for the same four-month period last year.
Keyword: China to extend EV incentive scheme