BUSINESS

China to Cut Export Tax Rebate for New-Energy Vehicles

Published: Oct. 13, 2026 2:17 a.m. GMT+8

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New-energy vehicles for export gather at a terminal of Lianyungang Port's Oriental Port branch in Jiangsu province on Oct. 12, 2026. Photo: VCG

China will cut the value-added tax export rebate for new-energy vehicles to 9% from 13% on April 1, 2027, the Ministry of Finance and the State Taxation Administration said in a joint announcement Monday. The 13% rebate for combustion-engine vehicles will remain unchanged.

The lower rebate is expected to raise export costs for Chinese automakers and could lead to higher prices overseas. That, in turn, could ease trade tensions with markets including the European Union.

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China cuts VAT export rebate for new-energy vehicles to 9% from 13% on April 1, 2027; combustion-engine rebate stays at 13%.
Higher export costs may raise overseas prices, potentially easing trade tensions with the EU.
NEVs made up 48.8% of China's 8.2 million vehicle exports in first nine months of 2026; battery and solar rebates have also been cut.

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Who’s Who

SAIC Motor Corp. Ltd.: SAIC Motor Corp. Ltd. is a Chinese automaker mentioned in the article as having begun building overseas plants. The cut in new-energy vehicle export rebates (from 13% to 9%) makes local overseas production more attractive compared to exporting finished vehicles from China, potentially prompting SAIC to expand manufacturing abroad.

BYD Co. Ltd.: BYD Co. Ltd., a Chinese automaker, is mentioned in the article as one of the companies building overseas plants. The cut in NEV export rebates (from 13% to 9%) makes local production abroad more attractive compared to exporting finished vehicles from China, potentially affecting BYD's export strategy.

Great Wall Motor Co. Ltd.: Based on the article, Great Wall Motor Co. Ltd. is a Chinese automaker that has begun building overseas plants. The reduced export rebate for new-energy vehicles would make local production more attractive compared to exporting finished vehicles from China, potentially influencing their international manufacturing strategy.

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What Happened When

December 2024：: Rebates for solar and battery products fell to 9% from 13%.

April 2026：: Solar rebate was eliminated and battery rebate was cut further to 6%.

First nine months of 2026：: China exported 8.2 million vehicles, with new-energy vehicles accounting for 48.8% of the total.

September 2026：: Exports of new-energy vehicles rose 160% year-on-year to 571,000, while combustion-engine vehicle exports rose 12% to 482,000.

October 8-9, 2026：: Talks held in Beijing between Chinese Commerce Minister Wang Wentao and European Commission Executive Vice President Maroš Šefčovič, including agreement on hybrid-vehicle trade.

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