China will scale back tax incentives for new energy vehicle (NEV) purchases starting January 1, 2026, according to a joint notice issued by the Ministry of Industry and Information Technology, Ministry of Finance, and State Taxation Administration.
Under the policy, valid from January 1, 2026 to December 31, 2027, consumers purchasing vehicles listed in the official NEV eligibility catalog will continue to receive tax benefits, but at a reduced level. The incentive will shift from a full purchase tax exemption to a 50% tax reduction.
As a result, the maximum tax benefit per vehicle will be lowered from RMB 30,000 (US$4,267) to RMB 15,000 (US$2,134).
Authorities said the adjustment reflects a transition toward a more sustainable incentive framework as China’s NEV market continues to mature.
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