China Extending EV Tax Rebate Program Until End Of 2020

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The government of China has elected to extend the current tax rebate program for so-called “new energy vehicles” — all-electric vehicles, plug-in hybrids, hydrogen fuel cell vehicles, etc. — through the end of 2020.

The country’s finance minister revealed in a public statement released on Wednesday that the tax exemption, instead of being phased out at the turn of the new year as had been planned, would be extended until December 31st 2020.

The timing of the announcement — just before the phaseout — is interesting, as it implies that the government may have been planning to do so for some time but simply intended to use the possible phaseout to shake the branches a bit — or to spur even more new energy vehicle purchases than would have been made otherwise.

Importantly, this news means that the tax rebate program will remain in place for the first two years that the planned new energy vehicles quota system is being put into place (that begins in 2019).

Reuters provides more: “Amid the shift, some global automakers have called on China to maintain financial support for the market, citing concerns consumer demand alone will not be sufficient to drive sales without state-backed incentive schemes to lure buyers.

“The Ministry of Finance said the extension would help ‘increase support for innovation and development in new energy vehicles,’ an area where China is hoping it can catch up — and even overtake — more established global automaker rivals. Local firms like NEV specialist BYD Co Ltd are now jostling with global names such as Ford Motor Co and Nissan Motor Co Ltd in the race to develop successful ‘green’ vehicles for the Chinese market.”

To add a bit of important context here, China’s overall auto market growth slowed somewhat in 2017, but sales of new energy vehicles continued to grow at a strong rate (around 50% year on year).


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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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