(JW Insights) Jun 22 -- China will extend its preferential purchase tax policy for new energy vehicles (NEVs) to the end of 2027, reported Xinhua on June 21.

Purchase tax will be exempted for NEVs bought in 2024 and 2025, and each passenger vehicle bought will enjoy up to RMB30,000 (about $4,178.56) of tax exemption, according to a statement released by the Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology.

For NEVs bought in 2026 and 2027, purchase tax will be halved and each passenger vehicle bought will enjoy up to RMB15,000 (about $2,089.28) of tax exemption, said the statement.

The move seeks to support the NEVs sector's development and stimulate automobile consumption. The tax incentive covers fully electric, hybrid and fuel-cell vehicles that are included on an official list.

According to Xinhua, preliminary estimates show the policy will result in a total of RMB520 billion ($72.4 billion) of tax exemptions and reductions, Vice Minister of Finance Xu Hongcai said at a press conference on June 21.

(Li PP)