Does this mean that Australia’s government and billionaires will stop snorting hydrogen fumes to make the dollar signs in their eyes spin faster? Unlikely. That will take another few years.
Category: eV
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China’s Ministry of Finance explains in detail how consumers will enjoy NEV tax breaks in 2024-2027
For a NEV with a pre-tax price of RMB 300,000, consumers will continue to be exempt from purchase tax from 2024-2025, while they will be subject to RMB 15,000 in purchase tax from 2026-2027.
(Image credit: CnEVPost)
China's Ministry of Finance (MOF) has provided a more detailed explanation of its future purchase tax policy for NEVs (NEVs), after announcing the policy for the next four years last week.
In a Q&A posted on its website today, the MOF provided details on how the NEV purchase tax will be levied over the next four years.
In short, for a NEV with a pre-tax price of RMB 300,000 ($41,600), there will continue to be no purchase tax in 2024-2025, while in 2026-2027 there will be a purchase tax of RMB 15,000.
On June 21, the MOF announced that NEVs with a purchase date between January 1, 2024, and December 31, 2025, will continue to be exempt from vehicle purchase tax. Still, the exemption amount will not exceed RMB 30,000 per vehicle.
For NEVs with a purchase date between January 1, 2026, and December 31, 2027, the vehicle purchase tax will be levied at half the normal rate, with the tax reduction not exceeding RMB 15,000 per vehicle.
When consumers purchase a NEV, if the invoice for the car and the battery are separate, the taxable price is the price of the body before tax.
In today's Q&A, the MOF provided examples of how the NEV purchase tax will be calculated over the next four years:
For the years 2024-2025, NEV purchase tax continues to be exempted, but the tax exemption amount for each vehicle will not exceed RMB 30,000.
For example, Mr. Li purchases a new energy passenger vehicle that meets the tax exemption criteria on February 5, 2024.
If the sales price of the vehicle is RMB 300,000 (excluding VAT, same below), then the normal vehicle purchase tax rate is 10 percent and his tax amount is RMB 30,000 (30 x 10 percent).
According to the tax exemption policy at this time, the amount of tax exemption he can enjoy is RMB 30,000. Since the vehicle does not exceed the RMB 30,000 tax exemption limit, Mr. Li is not required to pay vehicle purchase tax.
For a new energy passenger car with a sales price of RMB 500,000, the normal tax amount is RMB 50,000 (50×10 percent). According to the tax exemption policy, Mr. Li is entitled to a tax exemption of RMB 30,000 and needs to pay vehicle purchase tax of RMB 20,000.
In 2026-2027, the vehicle purchase tax will be reduced by half, while the tax reduction will not exceed RMB 15,000 per vehicle.
For example, on March 1, 2026, Mr. Zhang purchases a new energy passenger car that meets the tax reduction criteria.
If the sales price of the vehicle is RMB 300,000 and the vehicle purchase tax rate is 10 percent, then the normal tax amount is RMB 30,000 (30 x 10 percent).
According to the policy of 50 percent reduction in purchase tax, the tax reduction is RMB 15,000 (3×50 percent). As the vehicle does not exceed the RMB 15,000 tax reduction limit, Mr. Zhang is entitled to a RMB 15,000 tax reduction and is required to pay RMB 15,000 vehicle purchase tax.
If the sales price of the vehicle is RMB 500,000, then the tax payable is RMB 50,000 (50 x 10 percent). Under the 50 percent reduction policy, the tax reduction is RMB 25,000 (5 x 50 percent), which exceeds the RMB 15,000 tax reduction limit.
According to the policy at that time, Mr. Zhang is entitled to RMB 15,000 tax reduction and needs to pay RMB 35,000 vehicle purchase tax.
CnEVPost would like to remind that the prices of the vehicles in the above examples are all prices excluding VAT.
In China, the basic VAT rate is 13 percent. The prices that car companies are showing to consumers are the prices including VAT.
($1 = RMB 7.2119)
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Lotus Eletre SUV boasts 20-minute charging, bound for Europe and UK soon
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Li Auto finished the first half of the year with more than 130,000 units sold and does not have any ability to sell 400,000 vehicles for the full year, its CEO said.
(Image credit: CnEVPost)
Li Auto (NASDAQ: LI) CEO denied that the company raised its sales target to 400,000 units this year, after the reports sparked widespread discussion.
"A media report today that our target for this year has been adjusted to 400,000 units is false and unfounded," Li Auto founder, chairman and CEO Li Xiang said on Weibo today.
Li Auto finished the first half of the year with more than 130,000 units sold and does not have any ability to make the full year sales of 400,000 units, he said.
The company's capabilities, including product, sales, capacity and organization, cannot support 400,000 units sold this year, and the gap is huge, Li said.
"The automotive industry's capability chain is built one step at a time, with no particular shortcuts," he added.
In a report yesterday, local media outlet 36kr cited sources familiar with the matter as saying that Li Auto recently raised its full-year sales target to 400,000 units from the original 300,000.
In addition to the overall sales target, Li also set targets for sales of specific models, according to the report.
Li set a goal for the Li L7 to achieve 20,000 deliveries of a single model in October, and to keep deliveries of the more expensive Li L9 and Li L8 above 10,000 units, bringing overall deliveries to 40,000 units/month, the report said.
Earlier today, Li Auto said on Weibo that it had sold 27,300 units this month as of June 25 and was on track to reach its 30,000-unit monthly sales goal.
Assuming Li Auto sells 30,000 vehicles in June, the 400,000-unit full-year sales target means it will need to sell an average of about 44,000 units per month in the second half of the year.
On June 18, Li said on Weibo that most members of Li Auto's management team thought the company should set an annual sales target of 360,000 units at the beginning of the year, but he ultimately decided to set a budget target based on annual sales of 306,000 units.
"This was partly because I didn't think we could be too optimistic about the economic environment this year, and partly because we didn't meet our budget targets for all three years from 2020-2022," he said at the time.
Li said the too-low targets he set led the company to place orders at suppliers at the beginning of the year that were clearly not keeping up with current sales, so several key components would take more than a quarter to reach the right capacity if production ramp-up began now.
Separately, Li said in another Weibo today that the Li L7 is on track to deliver more than 13,000 units this month, although it faces an onslaught of new models in June including IM Motors' LS7, Nio's new ES6.
Sales of the Li L8 have risen from more than 7,000 last month to more than 9,000 this month, and the Li L9 has improved from slightly more than 6,000 last month to more than 8,000, he said.
In addition to deliveries that can exceed 30,000, Li Auto has seen record order in-takes, Li said, adding that capacity has become the biggest bottleneck in deliveries, not demand.
All three of Li Auto's SUVs currently on sale are extended-range electric vehicles (EREVs), which are essentially plug-in hybrids.
In retweeting Li Auto's Weibo today about last week's sales figures, Li hinted that the company could launch sedan models next.
The focus is generally on the sedan lineup as dealers of luxury brand fuel cars struggle to meet their first-half sales targets this week, so sedan sales for t first-tier luxury brands are very solid, he said.
"So, the question is, shall we launch sedan offerings?" He asked.
China NEV insurance registrations for week ending Jun 25: Tesla 16,700, Li Auto 7,500, Nio 3,200
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Kia EV9 First European Pricing Revealed, US MSRP Expected To Be Similar
For now, only the large 99.8-kWh battery is available on the Old Continent.
Kia EV9 First European Pricing Revealed, US MSRP Expected To Be Similar
For now, only the large 99.8-kWh battery is available on the Old Continent.
