New Energy Vehicle Tax Breaks to End Completely in 2027

Starting January 1, 2027, the policy of halving vehicle and vessel tax for fuel-efficient vehicles, as well as the full exemption from vehicle and vessel tax for battery electric commercial vehicles, plug-in hybrid (including range-extended) commercial vehicles, and fuel cell commercial vehicles, will be completely phased out. This policy has been in effect for 15 years since its introduction. Earlier, in early 2024, the purchase tax exemption for new energy vehicles (NEVs) was adjusted from full exemption to a 50% reduction, with an upper limit set on the exempted amount. The upcoming termination of these vehicle and vessel tax incentives marks a gradual and orderly phase-out of the tax support system for NEVs. These adjustments are seen as a key step toward shifting the industry from policy-driven growth to market-driven development. Some experts also view this move as signaling the start of reforms toward "parity between fuel-powered and electric vehicles," encompassing aspects such as road access rights, pricing rules, and tax fairness—potentially serving as one benchmark for assessing the maturity of the automotive market in the future.