China to end vehicle tax exemption for plug-in hybrids and range-extended EVs in 2027

Starting 1 January 2027, China will remove the annual “Vehicle and Vessel” tax exemption that has applied since 2012 to: plug-in hybrid electric vehicles (PHEVs), including range-extended EVs (REEVs); commercial battery electric vehicles (BEV); and fuel-cell commercial vehicles.  China's Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology (MIIT) jointly issued the policy on 3 July 2026.  BEV and fuel-cell passenger cars remain fully exempt from the tax as those taxes are based on engine displacement and these vehicles have none, therefore, they fall outside its scope entirely.