2026-2027 Tax Exemptions Confirmed for New Energy Vehicles in China with Revised Conditions

Confirmed! The exemption from vehicle purchase tax for new energy vehicles will continue in 2026-2027!

On October 9, the Ministry of Industry and Information Technology announced that the exemption from vehicle purchase tax for new energy vehicles will persist through 2026 and 2027. However, there have been adjustments and changes to the conditions for these vehicles. For pure electric passenger vehicles, the energy consumption per 100 kilometers must not exceed the standard set forth in the national guideline “Energy Consumption Limits for Electric Vehicles Part 1: Passenger Cars” (GB 36980.1—2025). For vehicles with a maximum designed total mass exceeding 3500 kg, the energy consumption limits will reference those for passenger cars at the 3500 kg threshold.

According to the announcement from the Ministry of Industry and Information Technology, the Ministry of Finance, and the State Administration of Taxation (Announcement No. 24 of 2025), the following adjustments have been made to the technical requirements for new energy vehicles eligible for purchase tax exemptions:

1. Pure Electric Passenger Vehicles: The energy consumption per 100 kilometers for pure electric passenger vehicles must not exceed the limits specified in GB 36980.1—2025 for corresponding models. For vehicles with a maximum designed total mass exceeding 3500 kg, the limits will align with those specified for 3500 kg passenger vehicles in the same standard.
2. Plug-in Hybrid (Including Extended Range) Passenger Vehicles:
   • The pure electric driving range for plug-in hybrid vehicles must meet a conditional equivalent all-electric range of at least 100 kilometers.
   • The fuel consumption during the electric mode test (excluding energy conversion fuel consumption) must be less than 70% for passenger vehicles with a curb weight below 2510 kg and less than 75% for those 2510 kg and above, compared to the limits in GB 19578—2024. For vehicles with a maximum designed total mass over 3500 kg, the fuel consumption limits will refer to those for 3500 kg vehicles in the same standard.
   • The energy consumption during the electric consumption mode test must be less than 140% for passenger vehicles under 2510 kg curb weight, and less than 145% for those at or above 2510 kg, relative to the limits in GB 36980.1—2025. Again, for vehicles exceeding 3500 kg, the limits will follow the established guidelines for that weight category.
3. Other Technical Requirements: All remaining technical requirements will continue to follow the stipulations outlined in the Announcement on Adjusting Technical Requirements for Exempting Vehicle Purchase Tax for New Energy Vehicles (Announcement No. 32 of 2023).
4. From January 1, 2026, models included in the Directory of New Energy Vehicles Exempt from Vehicle Purchase Tax must comply with the requirements outlined in this announcement. Models listed before December 31, 2025 that meet the requirements will automatically transition into the first issue of the 2026 directory. Models that do not meet these criteria will be removed from the directory. Vehicles that are not compliant and wish to be included in the first issue of the 2026 directory must complete their application by December 12, 2025. Those removed can reapply for inclusion in the directory.
5. Beginning on January 1, 2026, following the release of the updated directory, new energy vehicles included will be eligible for the vehicle purchase tax exemption as per regulations. Tax authorities will process tax reduction procedures based on the directory, exemption identification, and any additional documentation required for vehicle purchase tax declaration.

This announcement aims to encourage the development and adoption of new energy vehicles by providing tax incentives while ensuring compliance with evolving technical standards.

Issued by the Ministry of Industry and Information Technology, the Ministry of Finance, and the State Administration of Taxation on September 22, 2025.