China raises tech specs for EV tax breaks with the aim of boosting development, competition
- Ministry of Industry and Information Technology hopes that the new rules will ‘guide enterprises to continue improving product quality and performance’
- Inclusion of battery-swapping EVs in the tax exemptions could boost the use of this technology, Huatai Securities analyst says
More than 90 per cent of the existing NEV models in China, including electric vehicles (EVs), plug-in hybrid vehicles and fuel-cell cars, will continue to receive tax breaks under the new technical requirements, the Ministry of Industry and Information Technology said on Tuesday.
The newly issued technical requirements adjust regulations to match the rapid development of NEV technologies in China, the ministry said. It hopes that the new rules will “guide enterprises to continue improving product quality and performance” and accelerate the high-speed development of the NEV industry.
The update, issued on Monday by the ministry along with the Ministry of Finance and the State Taxation Administration, is the first adjustment of the technical requirements for NEV tax exemptions since 2017.
“Appropriate and flexible policy guidance can help maintain healthy competition and sustainable development in the industry,” Song Tingting, an analyst at Huatai Securities, said in a report on Tuesday.
The update, which will take effect from June 1 next year, requires the driving range of eligible passenger EVs to exceed 200km, doubling the 100km threshold set in 2017. It also requires the energy density – the amount of energy a battery contains compared to its weight or size – of passenger EVs to be no lower than 125 Watt hours per kilogram (Wh/kg), up 32 per cent from the previous 95 Wh/kg threshold.