Chinese government will extend a tax rebate on purchase of new-energy vehicles (NEVs) until the end of 2020, in a continuation of policy support for the shift away from the internal combustion engine.
Ministry of Finance announced on Wednesday the tax exemption, which was set to expire at the end of this year, will now run until December 31, 2020 for electric, plug-in hybrid and fuel-cell vehicles.
The extension comes as automakers in China prepare 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.
Overseas auto makers have called on China to maintain financial support for the market, citing concerns that consumer demand is not sufficient to drive sales without State-backed incentive schemes.
The finance ministry said the extension would “increase support for innovation and development in new-energy vehicles,” an area where China is hoping to catch up – and even overtake – more established global rivals.
Local automakers like EV specialist BYD are now jostling with global names such as Ford and Nissan in the race to develop new vehicles specifically for the Chinese market.
