China’s State Council executive meeting has decided that three types of ‘new energy vehicles’ (NEVs) – electric vehicles, plug-in hybrids and fuel-cell powered cars – will be exempt from vehicle purchase tax from 1 September 2014 to the end of 2017.
The purchase tax accounts for around 10% of the net value of the vehicle, according to China’s state media, and the government hopes that the exemption will boost sales of new energy vehicles.
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The exemption applies to imported vehicles as well as domestically produced ones, according to a State Council statement. The government is planning to compile a catalogue of eligible models.
China’s government is also reportedly mandating that NEVs make up at least 30% of government vehicle purchases by 2016. The China Daily reported that government organisations and public institutions will be required to add parking spaces reserved for new-energy vehicles and ensure the ratio of charging facilities to the vehicles is equal, according to the plan.
Beijing is taking measures to encourage NEV adoption in response to rising air quality and environmental concerns inside China.
