Batteries got more expensive in 2022 after years of dropping prices — and it could delay access to cheaper electric cars
Business InsiderNov 25, 2022
China Announces $72B Package of Electric Vehicle Tax Breaks
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Image copyright: Rutger van der Maar [via Wikimedia Commons]
The Facts
On Wednesday, China announced its biggest tax break package for electric vehicles and other green energy cars to date. The $72.3B (520B yuan) package will provide incentives to buyers over the next four years in the hopes that it will boost slow sales.
Buyers of new electric vehicles in 2024 and 2025 will be exempt from the purchase tax up to a little more than $4K, and the exemption will be cut in half in 2026 and 2027.
The Spin
Anti-China narrative
China is getting desperate to spark better auto sales and more consumer spending. The PRC's economy, which is the second largest in the world, isn’t growing as fast as it would like, so it’s attempting to artificially increase demand. If this doesn’t work, it may have to rethink its approach to the post-COVID financial world.
Pro-China narrative
Things are going swimmingly for China’s economy, especially in the electric vehicle realm, so, of course, it’s going to continue offering tax exemptions. Sales of Chinese electric vehicles increased 60.2% year on year in May, and the first half of 2023 has witnessed nearly a 50% increase in purchases. The tax exemptions work.