China will extend a tax incentive for electric vehicle purchases beyond the December sunset date as the government tries to expand the market for EVs, an area where domestic manufacturers hold an advantage, reports Nikkei Asia.
The State Council, China’s cabinet, decided Friday to continue the acquisition tax exemption for new energy vehicles, a catch-all term for various types of electrified cars. The State Council did not specify the length of the extension, but “it could be for another year,” an industry group executive said.
China imposes an automobile acquisition tax of roughly 10% the price of the vehicle, according to local media. Beijing instituted relief for buyers in 2014 to encourage production and sales of low- and zero-emission vehicles. The deadline was set for the end of the year.