China has officially ended an 11-year tax break on lithium-ion electric vehicle batteries, reinstating the consumption tax as of September, according to KrASIA. This move marks a significant shift in the country’s policy toward electric vehicle incentives.
In addition, China plans to phase out vehicle purchase tax exemptions entirely by 2028, signaling a gradual reduction in government support for new energy vehicles. These changes reflect Beijing’s evolving approach to balancing industry growth with fiscal considerations.
For Japanese investors and market participants, China’s policy adjustments could influence regional supply chains and pricing dynamics in the EV and battery sectors, areas where Japan maintains strong competitive positions.