China to Extend Electric Vehicle Registration Tax Exemption Benefits

[Photo by AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] The Chinese government has decided to extend the electric vehicle registration tax exemption benefit, which was scheduled to end this year.

According to the Shanghai Securities News on the 19th, the Chinese government held a meeting on the development of the new energy vehicle industry yesterday, chaired by Xiao Yaqing, Minister of the Ministry of Industry and Information Technology, and decided to promptly prepare and implement support policies for new energy vehicles, including the extension of the registration tax exemption benefit.

Attention is focused on whether the electric vehicle purchase subsidies will also be extended during the policy formulation process.

The two main pillars of the new energy vehicle support policy, registration tax exemption and subsidy payments, were originally planned to end in 2020 but were extended for two years to overcome the economic shock caused by the COVID-19 pandemic.

Despite the rapid slowdown of the Chinese economy, demand for electric vehicles in China is rapidly increasing.

According to statistics from the China Passenger Car Association (CPCA), new energy vehicles accounted for 2,989,000 units of the total passenger cars sold last year, a 169.1% surge compared to 2020. While sales of conventional internal combustion engine vehicles in China decreased by 1.02 million units last year, sales of new energy vehicles increased by 1.86 million units compared to the previous year.

According to the Wall Street Journal (WSJ) report on the 18th, the number of electric vehicles sold in China last year was 3.2 million, exceeding CPCA’s statistics. This overwhelming world number one record was followed by Germany (680,000), the United States (660,000), the United Kingdom (310,000), France (310,000), Norway (150,000), Italy (140,000), Sweden (140,000), the Netherlands (90,000), and South Korea (90,000).

The Chinese government’s push to stimulate electric vehicle consumption is due to the fact that consumption, one of the most important drivers of economic growth, is not recovering.

Among consumption, investment, and exports, consumption has the highest contribution rate to China’s gross domestic product (GDP). The National Bureau of Statistics of China recently announced economic statistics for 2021, stating that the contribution rate of consumption to GDP last year reached 65.4%.

This content was produced with the assistance of AI translation services.