China extends tax rebate for electric cars, hybrids

Baojun E100 all-electric battery cars are being charged in the parking lot in front of a Baojun NEV Experience Center store in Liuzhou
Baojun E100 all-electric battery cars are seen while they are being charged in the parking lot in front of a Baojun NEV Experience Center store in Liuzhou, Guangxi Zhuang Autonomous Region, China, November 8, 2017. Picture taken November 8, 2017. REUTERS/Norihiko Shirouzu

December 27, 2017

BEIJING/SHANGHAI (Reuters) – China will extend a tax rebate on purchases of so-called new-energy vehicles (NEV) until the end of 2020, a boost for hybrid and electric car makers amid a shift by policy-makers away from the traditional internal combustion engine.

The finance ministry said in a statement on Wednesday the tax exemption, which was set to expire at the end of this year, will run from Jan. 1, 2018 until Dec. 31, 2020 for electric, plug-in petrol-electric hybrid and fuel-cell powered vehicles.

The extension comes as automakers in China brace to meet strict NEV quotas starting in 2019 that are sparking a flurry of electric car deals and new launches of electric and hybrid models.

Amid the shift, some global automakers have called on China to maintain financial support for the market, citing concerns consumer demand alone will not be sufficient to drive sales without state-backed incentive schemes to lure buyers.

The Ministry of Finance said the extension would help “increase support for innovation and development in new energy vehicles”, an area where China is hoping it can catch up – and even overtake – more established global automaker rivals.

Local firms like NEV specialist BYD Co Ltd are now jostling with global names such as Ford Motor Co and Nissan Motor Co Ltd in the race to develop successful “green” vehicles for the Chinese market.

China’s auto market, the world’s largest, has slowed sharply this year, but new-energy vehicles has been a bright spot. NEV sales in January-November jumped 51.4 percent and are on track to hit a target of 700,000 NEV sales this year.

(Reporting by Adam Jourdan in SHANGHAI and Beijing Monitoring Desk; Editing by Tom Hogue and Christopher Cushing)

  • Scott

    These electric cars sound good but there is some real safety issues. Its the batteries and if you get in accident the possible of electrical shocks can happen that can hurt to kill you then there is explosion possibilities. Working on electrical care can be dangers. Then you have water issue with the Battery for if the Battery get any cracks and water gets into in the Battery it burns and explodes. Electric cars have their own issues.

    The Hydrogen cars is good answer over electric. Todays cars are cleaner then ever.

  • bucketnutz

    It has a dual Purpose, it doubles as a Casket.

  • landy fincannon

    Autonomous driven electric cars will be mandated by the government, soon.

  • Phil

    And don’t trip over the charging cords…