China to extend NEV purchase tax exemption, NEV sales to reach 5.7 mln units in 2023 – Morgan Stanley
MACRO VIEWS & ANALYSIS
China to extend NEV purchase tax exemption, NEV sales to reach 5.7 mln units in 2023 – Morgan Stanley
MACRO VIEWS & ANALYSIS

China to extend NEV purchase tax exemption, NEV sales to reach 5.7 mln units in 2023 – Morgan Stanley

 

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China’s new energy vehicle sector is expected to continue to enjoy the exemption of car purchase tax after the Politburo, the top decision-making body of China’s Communist Party, called for reviving domestic consumption last Thursday, Morgan Stanley said in a note on Monday.

Apart from increasing license plate quota and relaxing vehicle purchase restrictions, the Chinese government was expected to extend the the wavier of the 10% vehicle purchase tax for NEV buyers in 2023, which will mark the third extension of the policy since its introduction in 2014, it said.

It noted that even if the tax exemption is extended, the policy to provide subsidies for electric vehicle will still expire at the end of this year.

Morgan Stanley maintained the forecast for EV sales in China in 2022-23 at 5.7 million units and 6.6 million units, respectively, growing by 72% and 15% from a year earlier, it said. The extension of purchase tax exemption should be able to facilitate the EV sector to maintain healthy growth in sales volume, it said.