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Chinese authorities are mulling extending the electric car subsidy program for this year

Chinese authorities are mulling extending the electric car subsidy program for this year

According to many experts, China's electric car market could not have become the world's largest without active support from the government, which since 2009 has spent $14.8 billion on subsidy payments to buyers of private and commercial vehicles with traction electric motors.
The subsidy program was set to end this year, but authorities are mulling extending it until the end of next year.Image source: BYDThis was reported by Reuters, citing its own knowledgeable sources.
In April this year, sales of new vehicles in China fell by 48%, while sales of electric cars and hybrids rose by 45% to 299,000 units.
In March, the volume of sales of cars with new types of power units more than doubled, so the Chinese authorities want to compensate the economic slowdown provoked by the new lockdowns with new stimulating measures.Initially, the local authorities wanted to refuse subsidizing the purchase of electric cars by Chinese citizens back in 2020, but the pandemic prolonged the program for a couple of years.
It is noteworthy that about 40% of the Chinese market of electric cars now are cars worth about $4,000, most of them are not covered by subsidies.
But buyers of more expensive models are able to save a couple of thousand dollars from the car.At the same time the value of subsidies in the years decreased, and tax incentives for buyers of cars with power plants of the new type will be reduced.
If this year, the authorities allow buyers to not pay tax on the purchase of the vehicle, from next year will apply a rate of 5%.
Initially, the Chinese government wanted to introduce the tax at a rate of 10%, but in the current economic conditions it was decided to act in stages.

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