Key facts
- China is ending tax exemptions for plug-in hybrid and electric commercial trucks from 2027.
- Vehicle and vessel tax will apply to these vehicles starting in 2027.
- Fully electric passenger cars will continue to be exempt from the engine displacement-based tax.
China is set to conclude a long-standing vehicle tax exemption for plug-in hybrids and electric commercial trucks beginning in 2027. This rollback of financial incentives occurs as new-energy vehicles (NEVs) increasingly dominate the world's largest automotive market.
The Ministry of Finance and taxation authorities announced on Friday that owners of these specific vehicle types will soon be obligated to pay an annual vehicle and vessel tax. However, fully electric passenger cars, which are inherently exempt from the engine displacement-based tax, will not be impacted by this policy adjustment.