China Rolls Back Green Auto Tax Breaks as NEV Sales Surge

China will end a long-standing vehicle tax exemption for plug-in hybrids and electric commercial trucks starting in 2027, rolling back financial incentives as green cars dominate the world’s largest auto market.

The Ministry of Finance and taxation authorities announced on Friday that owners of these vehicles will soon be required to pay an annual vehicle and vessel tax. Fully electric passenger cars, which are inherently exempt from the engine displacement-based tax, will not be affected by the policy change.