China's Auto Tax System Faces Overhaul as ICE Sales Plunge 37.5%

China's fuel vehicle sales plunged 37.5% year-on-year in May 2026 to just 650,000 units, with their share of new car sales falling to 43.1%. The rapid decline in ICE vehicles has triggered a chain reaction including road maintenance funding gaps, forcing a comprehensive overhaul of the auto tax system.