After announcing the implementation of its zero-emission vehicle mandate, which will start in 2019, China now has also agreed to extend its electric car rebate until the end of the decade.
“The finance ministry said in a statement on Wednesday the tax exemption, which was set to expire at the end of this year, will run from Jan. 1, 2018 until Dec. 31, 2020 for electric, plug-in petrol-electric hybrid and fuel-cell powered vehicles.”
The rebate is worth 10% of the value of electric and plug-in vehicles, which can be worth up to $10,000.
There were talks about the government discontinuing the program earlier this year.
Considering they also recently removed their zero-emission vehicle mandate requirement for 2018, it would have had a greater impact on the EV transition in China.
The decision will be able to compensate a little for the delay in the mandate.
China’s electric vehicle adoption is already ahead of several other major markets and now that automakers will need zero-emission vehicles (ZEVs) to represent 10% of new car sales as soon as in 2019 and 12% by 2020, and that the rebate is staying in place, we can expect the pace to accelerate for EVs in the market.
The regulations pushed foreign automakers, like Daimler, Toyota, the Renault-Nissan alliance, GM, BMW, VW, and Ford, to all announce joint-ventures to produce electric vehicles in China over the last year.
It will also help domestic automakers to expand their EV lineups and potentially fuel their ambitions to start expanding outside of China, like Geely with Volvo and Lynk & Co.
I think there will be a lot of interesting products coming out of China on the EV front over the next few years.
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