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China will extend tax rebate to spur EV sales
Bloomberg | 2017/12/5

China plans to extend a tax rebate on the purchase of electric vehicles, according to people with direct knowledge of the matter.

China¡¯s government will continue to exempt the 10 percent purchase tax on EVs at least through 2020, the sources said. The current tax rebate policy is due to expire at the end of this year. 

The Ministry of Finance did not immediately comment.

Automakers are preparing to introduce a wave of all-electric vehicles and plug-in hybrids to comply with China¡¯s EV production mandate, which takes effect in 2019.

Last year, sales of all-electric vehicles and plug-in hybrids surged 53 percent to 500,700 units. Chinese motorists now own 1 million electric vehicles, more than triple the tally in 2015, according to the China Association of Automobile Manufacturers.

Now the central government is considering a proposal to ban sales of internal-combustion vehicles at some point in the future, said Xin Guobin, the vice minister of industry and information technology, in September. 

China, which has vowed to cap its carbon emissions by 2030, joined the United Kingdom and France in seeking a timetable for the elimination of vehicles using gasoline and diesel.
     
The government also may issue new EV production permits as early as the first half of 2018, according to sources. That would clear the way for Ford, Tesla and other manufacturers to launch production.

Since 2016, China has handed out 15 EV licenses to Volkswagen and other recipients to foster competition for the predominantly state-owned auto industry. 

The ensuing rush saw makers of smart TVs to air conditioners drumming up plans to enter the auto industry.
     
Ford and Volkswagen are among foreign carmakers that are preparing their China EV strategy to meet the country¡¯s stricter emissions rules. 

Ford¡¯s new venture with Anhui Zotye Automobile Co. plans to apply for a permit for a factory that can churn out 100,000 all-electric passenger vehicles a year.
     
However, battery prices must drop by more than half before EVs will be competitive with fossil-fuel cars, according to Bloomberg New Energy Finance. 

That¡¯s likely to happen by 2026, when the cost for lithium-ion battery packs is projected to fall to $100 (649 yuan) per kilowatt hour.

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