China to End Key Tax Break on Lithium EV Batteries

China will scrap a consumption tax exemption for lithium-ion batteries used in electric vehicles (EVs), phasing out an incentive for the EV industry as the country’s auto market undergoes a structural shift.

The move marks a critical step toward equalizing the tax burden between electric and gasoline vehicles in the world’s largest auto market, addressing a looming fiscal revenue shortfall as conventional car sales collapse.