The Chinese Electric Vehicle Industry Takes Off... Acquisition Tax Exemptions Amount to 8 Trillion Won in Our Currency

One-Year Extension of Acquisition Tax Exemption Period to Support 20 Trillion Won Until Next Year
China's Electric Vehicle Market in Expansion Phase... Supply Chain Expected to Expand Through Industrial Restructuring

[Asia Economy Senior Reporter Cho Young-shin] As sales of new energy vehicles (eco-friendly cars) such as electric vehicles surge in China, the amount of acquisition tax exempted has reached 8 trillion won. This indicates that the Chinese new energy vehicle market, including electric cars, has entered an expansion phase as government support policies for new energy vehicles translate into actual sales.

Photo by Xinhua News Agency Capture

According to Chinese media including Xinhua News Agency on the 3rd, a total of 3,194,000 eco-friendly vehicles were sold in China from January to July this year, a 120% increase compared to the previous year. The proportion of new energy vehicles in new car sales reached 22.1%.

The Chinese government announced in 2021 through the 'New Energy Vehicle Technology Roadmap 2.0' that by 2025, 20% of new cars sold would be electric vehicles and 40% would be hybrid vehicles.

It also added plans to expand the electric vehicle share to 40% by 2030 and 50% by 2035.

Guotai Junan Securities estimates the size of the Chinese new car market in 2025 to be 26.81 million units. Based on the Chinese government's eco-friendly vehicle roadmap, about 5.3 million of these will be electric vehicles in 2025. Within China, there is a prevailing forecast that more than 5.5 million electric vehicles will be sold this year, which is three years ahead of the roadmap.

China's new energy vehicle sales performance is also confirmed by the amount of acquisition tax exempted.

The State Taxation Administration of China revealed that the amount of acquisition tax exempted for new energy vehicles until July this year increased by 108.5% compared to the same period last year, reaching 40.68 billion yuan (approximately 7.9932 trillion won). Xinhua News Agency explained that sales of new energy vehicles have increased since the implementation of the acquisition tax exemption policy.

The State Council of China decided at a recent executive meeting to extend the acquisition tax exemption policy for new energy vehicles, which was scheduled to expire at the end of this year, until the end of next year. Xinhua News Agency projected that the additional acquisition tax exemption amount until the end of next year will reach 100 billion yuan (approximately 19.646 trillion won) due to the extension of the exemption period.

Photo by China First Financial Capture

The State Taxation Administration announced that it will update the 'List of New Energy Vehicle Models Eligible for Vehicle Acquisition Tax Exemption' and simplify tax payment procedures to ensure that benefits reach taxpayers promptly.

Chinese Premier Li Keqiang also promised during his visit to the headquarters of BYD, China's largest electric vehicle manufacturer, on the 17th of last month, that "policy support for electric vehicle production and sales will not be spared."

Liu Ying, Director of the Energy Saving and Emission Reduction Center at the Beijing Transportation Development Research Institute, said, "Due to the firmness of national strategies and policies, continuous improvement in vehicle technology, and expansion of convenience in usage environments, the attractiveness of new energy vehicles is increasing," adding, "In the future, the automotive industry should improve the supply chain through structural adjustment."

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