Taxes

In China, car sales are subject to three taxes:

According to the Chinese government’s “Consumption tax item and tax rate table,” vehicles’ consumption tax rate is divided into seven bands, depending on their cylinder capacity. Vehicles that do not have engine cylinders, including pure electric vehicles or hydrogen fuel cell electric vehicles, are not subject to the consumption tax. Only plug-in hybrid electric vehicles (PHEV) are subject to the consumption tax, but this only applies to car manufacturers.

In September 2023, the Chinese government announced the fifth extension of the NEV tax exemption policy, which will now apply until December 31, 2027. Moreover, the government set two stages for the tax exemption period, slo