Policy on purchase tax of NEV to optimize

China will extend and optimize the policy to reduce or waive purchase taxes on new energy vehicles amid efforts to promote high-quality development of the NEV industry and tap greater consumption potential, according to decisions made at a State Council executive meeting chaired by Premier Li Qiang on Friday.

The meeting noted that NEVs are a main focus of the transformation and upgrading of the automotive industry, which has broad space for development.

Reductions and exemptions on NEV purchase taxes will be prolonged and fine-tuned, and high-quality charging facilities will be built to further stabilize market expectations, improve the environment for consumption and tap greater consumption potential for such vehicles, it was stated.

The China Association of Automobile Manufacturers estimates that NEV sales in China will hit 9 million units this year, up from 6.88 million in 2022.

The meeting urged efforts to consolidate and enhance development strengths of NEVs, further optimize the industrial layout and achieve major advances in core technologies in key fields such as electric power systems, new chassis frameworks and intelligent driving systems. International and domestic resources will be leveraged in a well-coordinated way.

A sound mechanism of power battery recycling will be in place, and a vehicle-road-cloud ecosystem will be built to ensure that the entire industry chain, which promotes green development, is more self-supporting and that risks are better controlled, it was stated.

The meeting also decided on further policy steps to foster a market-oriented and law-based business environment in line with international standards, in a bid to anchor social expectations and boost confidence in development.

The meeting noted that China's economy got off to a good start this year, but the foundation of economic recovery is not fully solidified. Further steps will be taken to foster a market-oriented and law-based business environment in line with international standards on a priority basis.

The meeting said that a problem-oriented approach will be adopted to address pressing concerns facing enterprises and meet their actual needs. Targeted policy measures to ease market access, promote fair competition, protect intellectual property rights and build a unified national market will be rolled out in a phased way.

In addition, reforms in key areas to foster a more enabling business climate will be taken forward to enhance the effectiveness of relevant policies. Authorities concerned should strengthen their awareness that they are there to serve, according to the meeting.

The meeting called for greater efforts to exercise relevant policies and remove barriers hindering implementation to see that such policies are delivered on the ground and enhance enterprises' well-being.