China Tempts New Car Buyers with Electric, Hybrid Tax Breaks

Aug 29, 2014 03:30 PM EDT | Jordan Ecarma

As its major cities including Beijing battle increasing smog, China is encouraging the purchase of electric vehicles through new tax incentives that kick in next month.

Officials announced Friday that new tax breaks will be available for electric cars mostly built by Chinese companies, Reuters reported.

The official Xinhua news agency last month said that sales tax would be waived on select green car models starting Sept. 1.

China has already been offering subsidies on electric vehicles and continues to campaign for all-electric and hybrid plug-in cars in an effort to reduce pollution.

The country renewed a subsidies program last year to promote green vehicles for another three years. For the initiative, Beijing gives up to 60,000 yuan, or $9,767, for the purchase of an all-electric, battery-powered vehicle and up to 35,000 yuan for a hybrid plug-in that is close to being totally electric.

On Friday, the Ministry of Industry and Information Technology posted a list of models approved for the tax incentives program that included 17 vehicles from 11 automakers. The list had one model each from the China joint ventures of Nissan, General Motors and Daimler, Reuters reported.

China hopes to put 5 million green vehicles on its roads by 2020.

In February, Beijing was put on an "orange" level smog alert. Residents often have to stay inside due to pollution.

The concentration of fine particulates in the air, which are hazardous to human health, has risen to at least nine times higher than what is recommended by the World Health Organization, Bloomberg reported at the time.

Cars would be completely pulled from roads if smog reached the "red" alert level.

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