New Energy Vehicle and Vessel Tax Incentives to Be Phased Out Starting in 2027

[Policy Adjustment] Starting in 2027, tax incentives on vehicle and vessel taxes for energy-efficient and new energy commercial vehicles will be fully eliminated.

Policy Highlights: First Major Revision in 15 Years

Beginning January 1, 2027, the policy of halving vehicle and vessel taxes for energy-efficient vehicles will be abolished. Simultaneously, the exemption policy for battery electric commercial vehicles, plug-in hybrid (including range-extended) vehicles, and fuel cell commercial vehicles will be terminated. This adjustment applies universally to both existing and newly registered vehicles, with no transitional period provided.

Impact on Users: Most Private Passenger Car Owners Unaffected

Battery electric passenger cars and fuel cell passenger cars were never subject to vehicle and vessel taxes and thus remain unaffected. However, plug-in hybrid passenger cars will resume taxation, with annual tax amounts ranging from RMB 300 to RMB 540 for models with engine displacements between 1.0–1.6 liters (subject to local standards). Policies for conventional fuel-powered vehicles remain unchanged.