Photo taken on Aug 28, 2022, shows a complete vehicle production line at a new energy vehicle factory in Hefei, east China's Anhui Province. Photo:Xinhua

Chinese authorities on Wednesday announced a series of supporting policies to boost quality development of new-energy vehicles (NEVs) with total tax breaks amounting to 520 billion yuan ($72.3 billion) and measures to encourage domestic brands to expand overseas.

China has extended the current NEV purchase tax exemption policy to the end of 2027. The total tax breaks are estimated to amount to 520 billion yuan, Vice Minister of Finance Xu Hongcai said at a press conference.

NEVs purchased in 2024 and 2025 will be exempted from purchase tax amounting to as much as 30,000 yuan per vehicle, with the exemption halving for purchases made in 2026 and 2027, Xu said.

Wednesday's announcement is the fourth-time extension. The tax break was first announced in 2014 and extended in 2017, 2020 and 2022.

To extend purchase tax exemption is a medium-term support policy for the industry. It will not only release demand from the consumer side, but also greatly stimulate industrial upgrading, injecting impetus in the economy, Tian Yun, a veteran economist, told the Global Times.

The NEV sector has seen strong performance amid the energy transition and industry upgrading efforts in China. The country will pull out all the stops to further boost the fast-growing momentum of the sector, Tian said.

China will strengthen high-level open cooperation in the NEV field and support Chinese companies related to NEV industry to invest and set up factories abroad, Xin Guobin, vice minister of the Ministry of Industry and Information Technology, said at a press conference on Wednesday.

China will accelerate the development of standards such as general requirements for power battery recycling. China will also promote the formulation and revision of industrial standards including functional safety, network security, and operating system, Xin said.

As the competitiveness of domestic NEV brands have largely improved, unveiling more relevant supporting policies for China's NEV companies to go global will help them build up competitiveness, Tian said.

It is very important for China to establish industrial standards and promote standards internationalization, Tian added.

Global Times