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.
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“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.
I think there will be a lot of interesting products coming out of China on the EV front over the next few years.