BUSINESS

Xiaomi, EV Rivals Offer Tax Subsidies Ahead of China’s 2026 Incentive Cut

Published: Oct. 25, 2025 4:25 a.m. GMT+8

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A Xiaomi Corp. SU7 electric vehicle on display at one of the company's stores in Shanghai on March 16, 2025.

Xiaomi Corp. and several other Chinese electric vehicle makers are offering purchase-tax subsidies to cushion the impact of reduced government incentives set to take effect in 2026.

On Friday, Xiaomi announced a limited-time subsidy program for buyers who place orders before Nov. 30, offering up to 15,000 yuan ($2,100) to cover the difference in vehicle purchase tax if their cars are delivered after year-end. The offer applies to all three of Xiaomi’s current models.

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Chinese EV makers, including Xiaomi, are offering subsidies (up to 15,000 yuan) to offset reduced government NEV tax incentives effective from 2026.
From January 2026, NEV buyers will pay 5% purchase tax with a 15,000 yuan cap, replacing the current full exemption (up to 30,000 yuan) valid through 2025.
NEV sales now exceed 50% of China’s car market, sparking calls from industry leaders to phase out EV privileges and equalize policies with gas vehicles.

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Who’s Who

Xiaomi Corp.: Xiaomi Corp. is offering purchase-tax subsidies for its electric vehicles to mitigate the impact of reduced government incentives starting in 2026. The program, announced on Friday, provides up to 15,000 yuan ($2,100) for buyers who order by November 30 and receive delivery after year-end. This offer covers all three of Xiaomi's current models. The company faces long wait times for its electric vehicles, with the SU7 having 32-35 week waits and the YU7 having 45-48 week waits as of October.

Li Auto Inc.: Li Auto Inc. is among several Chinese electric vehicle makers offering purchase-tax subsidies to mitigate the impact of reduced government incentives starting in 2026. They have rolled out similar programs to rivals, with subsidies targeting models launched in late September, such as the L6, and extending through December.

Nio Inc.: Nio Inc., an English company with Chinese origins, has introduced a purchase-tax subsidy program for its models, including the updated ES8. This initiative aims to maintain sales momentum ahead of China's reduced new energy vehicle (NEV) tax exemption, which will take effect in 2026.

Geely Holding Group Co.: Geely Holding Group Co., through its brand Zeekr, is offering purchase-tax subsidies to its customers. This initiative, along with similar programs from other Chinese electric vehicle makers, aims to mitigate the impact of reduced government incentives set to take effect in 2026. The subsidies are a response to a major policy change that will scale back the new energy vehicle (NEV) tax exemption.

Zeekr: Zeekr, a brand under Geely Holding Group Co., is among several Chinese electric vehicle makers offering purchase-tax subsidies. These subsidies aim to offset the impact of reduced government incentives set to take effect in 2026. Zeekr has rolled out similar programs in recent weeks, targeting specific models and extending subsidy windows through December. This reflects a broader industry effort to maintain sales ahead of policy changes.

Huawei Technologies Co. Ltd.: Huawei Technologies Co. Ltd., through its Harmony Intelligent Mobility Alliance, is among several automakers offering purchase-tax subsidies to mitigate the impact of reduced government incentives starting in 2026. These programs aim to maintain sales momentum ahead of China's scaled-back new energy vehicle (NEV) tax exemption.

GAC Group: GAC Group's Chairman Zeng Qinghong urged regulators to establish "equal rights" between EVs and gas vehicles once NEVs crossed the 50% sales threshold in June 2024. This reflects a broader industry sentiment for a phased-out approach to preferential policies for new energy vehicles.

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What Happened When

March 2024：: Xiaomi launched its first NEV model, the SU7, and the initial delivery queue was over 50 weeks.

June 2024：: GAC Group Chairman Zeng Qinghong urged regulators to establish 'equal rights' for EVs and gas vehicles once NEVs cross 50% market share.

June 2025：: Xiaomi launched its SUV model YU7, with wait times of 45 to 48 weeks as of October 2025.

Late September 2025：: Several rivals, including Li Auto and Nio, launched new NEV models like the Li Auto L6 and Nio ES8.

October 9, 2025：: China’s MIIT and two other agencies announced updated technical requirements for vehicles eligible for tax exemptions from 2026 to 2027.