Electric Cars in China to be Sales Tax Free

China Ministry of Finance announces that all EVs and Fuel Cell Vehicles made and sold in the Chinese market will be eligible for 0% sales tax in 2012

Published: 12-Jan-2012

Pure electric and fuel cell vehicles are poor sellers in the Chinese market, in fact only Shanghai and Shenzhen have seen any sort of EV sales over the past 12 months but the rest of China seems to be a death ground for the development of a much lauded EV market. China has been labelled as the potential savior market for electric vehicles owing to the relatively modern infrastructure and recent introduction of the automobile into China.

The Ministry of Finance has declared that all EV’s and Fuel Cell Vehicles made and sold in the Chinese market will be eligible for 0% sales tax in 2012 according to a statement posted on their website, currently sales tax for a 1.6L gasoline car is at 10% of the cars price which makes a 0% EV look like quite a bargain from the consumers point of view. Consumers are obviously lacking a choice of cars when it comes to EV’s, but currently there are around 50 EV’s from local and joint venture companies that are readying their products for the local market. As well as receiving 0% sales tax on EV cars, consumers are also eligible for subsidies of up to 120,000rmb in certain pilot cities around China.

A lack of charging facilities are likely to hamper EV sales in the short term but once inner city and rural charging centers are established it is clear that consumers will be ready to make the switch.


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