On December 1, according to Qiongyan Finance and Economics, "relevant departments are discussing the continuation of the preferential purchase tax policy in 2023, or 7.5%. According to previous regulations, the purchase tax can be reduced by half to 5% as of December 31; if there is no new policy, it will be restored to 10% in 2023". In addition, there is a rumor that the subsidy policy for new energy vehicles, which will expire at the end of this year, will also be extended in 2023, and the subsidy amount will be 50% of the existing subsidy. In this regard, the relevant person in charge of the China Automobile Association said to the media: "I don't know about the relevant situation."

Fuel vehicle purchase tax reduction? No official announcement

On May 31 this year, the Ministry of Finance and the State Administration of Taxation issued the Announcement on Reducing the Purchase Tax on Some Passenger Cars, which proposed that the purchase tax on passenger cars with a displacement of 2.0 liters or less, whose purchase date is from June 1 to December 31, 2022, and whose single vehicle price (excluding VAT) does not exceed 300000 yuan, should be halved.

Guo Yan, director of the China Automotive Strategic Development Research Center of Tianjin University, said that compared with the two previous reductions in vehicle purchase tax, the restrictions on passenger vehicle emissions this time were adjusted from 1.6 liters and below to 2.0 liters and below. The stimulus was stronger and the benefits were broader, which released some improvement needs ahead of time.

If the policy is not continued next year, the domestic car market will show a "tail raising" growth in the fourth quarter of this year. Because consumers will seize the dividend tail of this policy to speed up the purchase of cars, and enterprises will also speed up the supply. " Chen Shihua, deputy secretary-general of China Automobile Industry Association, said through analysis.

Cui Dongshu, the secretary-general of the Passenger Transport Federation, told the relevant media that there was indeed such a proposal in the industry, but the policy should not be introduced so early.

The new energy vehicle purchase tax exemption has been extended and confirmed

On September 18, 2022, the Ministry of Finance, the State Administration of Taxation and the Ministry of Industry and Information Technology issued an announcement on the continuation of the policy of exempting new energy vehicles from vehicle purchase tax. For new energy vehicles purchased from January 1, 2023 to December 31, 2023, vehicle purchase tax will be exempted. New energy vehicles exempted from vehicle purchase tax shall be managed through the Catalogue of New Energy Vehicle Models Exempted from Vehicle Purchase Tax issued by the Ministry of Industry and Information Technology and the State Administration of Taxation.

Pure electric vehicles, plug-in hybrid electric vehicles (including plug-in vehicles) and fuel cell vehicles purchased since the date of publication of the Catalogue and listed in the Catalogue are new energy vehicles that meet the tax exemption conditions.

Will subsidies for new energy vehicles continue?

At present, relevant departments have not issued updated policies. On December 31, 2021, the Ministry of Finance, the Ministry of Industry and Information Technology and other four ministries and commissions issued the Notice on the Promotion and Application of Financial Subsidy Policies for New Energy Vehicles in 2022, which made it clear that subsidies will be completely withdrawn after December 31, 2022.

In the Q4 of 2022, many auto enterprises have issued relevant policies for the upcoming decline of the national subsidy. Different policies have the same purpose of stimulating consumption. Most of them adopt the policy of limited time price protection, while Tesla has introduced the policy of model 3/Y price reduction. Brands such as BYD, Geely, Xiaopeng, Jikrypton, Chang'an Deep Blue, Weilai, Smart, etc. provide display insurance policy under the condition that the price remains unchanged, and maintain the 2022 new energy national subsidy policy for customers who place orders before December 31, 2022 but have not collected the car within the year (see the announcement of each car enterprise for specific policies).

The CITIC Securities Research Report predicted that the general trend of intelligent electric industry in the future will continue to accelerate the evolution, the impact of the decline of subsidies at the end of the year will be limited, and the trend of electrification and intelligence will be upward. It is estimated that the sales of new energy vehicles in China will be 9 million in 2023, with a year-on-year growth of 31%.