On October 9, the Ministry of Industry and Information Technology, the Ministry of Finance, and the State Taxation Administration jointly released the Announcement on Technical Requirements for Exemption of Vehicle Purchase Tax for New Energy Vehicles from 2026 to 2027. This announcement outlines adjustments to the technical requirements for pure electric passenger vehicles and plug-in hybrid (including extended-range) passenger vehicles.
According to the announcement, starting from January 1, 2026, vehicles listed in the Catalog of New Energy Vehicles Eligible for Vehicle Purchase Tax Exemption must comply with the specified requirements. From this date, eligible new energy vehicles can benefit from the vehicle purchase tax exemption policy.
The adjustments for plug-in hybrid (including extended-range) passenger vehicles are significant: the pure electric driving range must meet the conditional equivalent full electric range of not less than 100 kilometers. This marks a substantial increase from the previous requirement of 43 kilometers, representing a rise of 132.6%.
Additionally, new technical requirements for plug-in hybrid vehicles will be categorized based on vehicle curb weight. The fuel consumption during the battery maintenance mode test must be less than 70% for passenger vehicles weighing under 2510 kg, and less than 75% for those at or above this weight. Furthermore, the energy consumption during the energy consumption mode test must be less than 140% for vehicles weighing under 2510 kg, and less than 145% for those at or above this weight, as compared to the energy consumption limits specified in GB 36980.1—2025.
Data from the China Automobile Dealers Association shows that in the first half of this year, the market share of pure electric vehicles in the domestic new energy vehicle market was approximately 60.9%, while plug-in hybrids accounted for about 29.3%, and extended-range vehicles made up about 9.8%.
Wang Xiaoqiu, Chairman of SAIC Motor Corporation, recently forecasted that by 2030, the penetration rate of new energy vehicles in China is expected to rise to 70%. The market development structure is projected to stabilize at a ratio of 4:3:3 among hybrid, pure electric, and fuel vehicles.
Cui Dongshu, Secretary-General of the Passenger Car Market Information Joint Conference, suggested that this adjustment aims to adapt to the rapid improvement in the driving range of new energy vehicles and advancements in engine extension technology. The goal is to ensure that policies align with technological developments. By raising technical thresholds, the initiative encourages companies to increase research and development investments, phase out outdated products, and shift the industry focus from expansion to high-quality development, thereby stabilizing long-term policy expectations for enterprises.
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