China has extended a tax break program for buyers of electric vehicles in a bid to reverse a decline in sales, Bloomberg has reported, citing a government briefing.
The latest sales numbers show that EV purchases in the world’s biggest market for electric vehicles rose by 41% over the first five months of the year. While quite an increase in itself, this compared to a 120% increase in EV sales over the first five months of last year.
The incentive program that the Chinese government has crafted for EV purchases comes down to a waiver of the 10%sales tax that other car buyers in the country have to pay. The program has been in place since 2014 and was supposed to end but was extended until the end of 2025. That extension follows another, earlier one, until the end of the current year.
China’s EV sales increased almost twofold last year, with one in four cars sold in the country battery electric. Earlier this week, Ford’s executive chairman Bill Ford admitted that the United States cannot compete with China on EVs, not yet.
"They developed very quickly, and they developed them in large scale. And now they're exporting them," Ford told CNN, adding "They're not here but they'll come here we think, at some point, we need to be ready, and we're getting ready."
Yet also this week a video emerged showing fields full of electric vehicles in China. The author of the drone footage, YouTuber Winston Sterzel said these cars were abandoned by the manufacturers, which knew they couldn’t sell them but produced them to get the subsidies.
The story got picked up by InsideEVs, which noted that there have been previous reports of such tactics but with bicycles, reported by The Atlantic and the South China Morning Post.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.