Starting in H2 2026, China's NEV vehicle and vessel tax policies enter an adjustment period, aligning with ICE standards. The purchase tax is halved to 5%. In May 2026, NEV penetration reached 47.7%. Trade-in subsidies offer up to RMB 20,000. For Central Asian and Russian buyers, these changes impact export pricing and competitiveness.
From January to April 2026, NEV sales under 80,000 yuan fell by nearly **50%** year-over-year, with pure electric micro-car retail plunging close to **70%**. Former blockbuster models like the Hongguang MINIEV and Chery QQ Ice Cream saw monthly sales drop to the **500-unit level**. The direct trigger was the new purchase tax policy effective January 1, which capped the tax reduction at **15,000 yuan**, significantly reducing subsidies for budget models.
From January 1, 2026, new energy vehicles no longer enjoy full purchase tax exemption. Instead, purchase tax is levied at 50% of the taxable amount, with a maximum reduction of 15,000 yuan per vehicle. The PHEV pure electric range threshold for tax benefits has been raised from 43km to 100km.
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