The first of the measures, developed by 17 government departments, is to support the purchase and use of NEVs.

(Image credit: CnEVPost)

China has unveiled measures to encourage auto consumption, at a time when economic growth continues to face challenges because of Covid.

Seventeen government departments, including China's Ministry of Commerce, jointly issued a notice today that mentions support for new energy vehicle (NEV) consumption and will study the extension of the NEV purchase tax exemption when it expires.

This means that China's policies to support the auto industry, especially NEVs, are beginning to enter the implementation phase following a high-level meeting late last month.

Chinese Premier Li Keqiang hosted an executive meeting of the State Council on June 22, saying the country would support the consumption of NEVs, according to an earlier CCTV report.

Taking into account the current reality, China is studying the extension of the policy on the exemption of purchase tax for NEVs, the meeting mentioned, according to the report.

To support the development of energy-efficient vehicles, China first began exempting NEVs from purchase taxes in 2014, allowing most consumers who buy such vehicles to save about 10,000 yuan ($1,580) relative to those who buy traditional fuel vehicles.

The policy originally expired at the end of 2017, but was extended to the end of 2020, and in March 2020, China renewed the policy until the end of 2022.

The notice issued today on measures to promote automobile circulation and expand automobile consumption says that the automobile industry is a strategic and pillar industry of China's economy, and the move is to further help stabilize the economic fundamentals and improve people's livelihoods.

The first item of the notice is to support the purchase and use of NEVs, and in addition to mentioning that China will study the extension of the purchase tax exemption for NEVs, it says the country will promote the consumption of NEVs in rural areas.

China will also actively support the construction of charging facilities, accelerate the construction of charging facilities in residential communities, parking lots, gas stations, highway service areas, passenger and freight hubs, and guide charging pile operating companies to appropriately lower charging service fees, according to the notice.

China will also remove unreasonable restrictions on the distribution of used cars and accelerate the promotion of the activity of the used car market, the notice said.

The country will optimize the environment for car use, promote the construction of urban parking facilities, and increase the use of local debt to support the construction of parking facilities.

China will develop auto culture and tourism and other consumption, and support the construction and operation of auto sports events, sports camps and other projects in terms of land and other aspects.

The country will also study and develop conditions for the identification of traditional classic vehicles, and promote the development of classic car-related industries and car culture such as display, collection, trading and events.