The tax exemption and reduction policies for vehicle purchases have clearly demonstrated their effectiveness.

China News Service, Beijing, November 16 (Reporter Liu Yuying) – This year, China has continued its policy of exempting new-energy vehicles from vehicle purchase tax and promptly introduced a measure to reduce the purchase tax on certain passenger cars. Wang Daoshu, Deputy Director of the State Administration of Taxation, stated on the 16th that the combination of "recurring + phased" incentives—where both the tax exemption and reduction policies work in tandem—has played a crucial role in boosting the recovery and stabilization of the automotive market, as well as stimulating domestic consumption. To support the development of the new-energy vehicle industry, China has implemented a policy of exempting these vehicles from vehicle purchase tax since 2014. In September of this year, the policy was extended for the third time, now set to expire on December 31, 2023. Wang Daoshu emphasized that this move has helped stabilize societal expectations, bolstered market confidence, and is of significant importance in advancing China’s strategic transition toward cleaner transportation and energy systems, while also fostering high-quality growth within the automotive sector.
To boost mass automobile consumption, China has introduced a temporary policy to halve the vehicle purchase tax on certain passenger vehicles. This measure applies to purchases made between June 1, 2022, and December 31, 2022, for passenger cars with engine displacements of 2.0 liters or less and priced at no more than 300,000 RMB per unit (the same currency applies hereafter). By targeting small-displacement, economy-oriented, and widely available passenger vehicles, the policy has effectively and swiftly stimulated current auto consumption.
The automotive industry is a strategic and pillar-based sector of the national economy, with broad coverage, a long industrial chain, and a massive market scale. Unlocking the potential for auto consumption is crucial in boosting overall consumer spending and stabilizing the broader macroeconomic landscape. From an implementation standpoint, the tax exemption policy for new-energy vehicles has already yielded significant positive effects.
At the regular State Council policy briefing held on the 16th, Wang Daoshu introduced that, from the beginning of this year until November 10, a total of 68.62 billion yuan in purchase tax for new energy vehicles has been exempted, representing a year-on-year increase of 101.2%. According to data from the unified invoice system for motor vehicle sales, as of November 10, cumulative sales of new energy vehicles reached 4.48 million units, up 78.1% compared to the same period last year. Meanwhile, the policy of reducing purchase tax on certain passenger vehicles has been implemented smoothly and has yielded significant results. From June to November 10 this year, a total of 39.75 billion yuan in purchase tax was reduced for eligible passenger vehicles. Data from the unified invoice system for motor vehicle sales also show that from June to October this year, sales of passenger vehicles with engine displacements of 2.0 liters or lower reached approximately 6.523 million units—representing a month-on-month increase of 20.6% compared to the period from January to May before the policy took effect.

Translated from Sina Auto

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