China poised to end acquisition tax exemption for new energy cars
Summary
The Chinese government in late July 2022 decided to extend the exemption for the third time, but did not indicate a deadline. However, it is concerned whether the cancellation of subsidization, plus an acquisition tax rate of 10%, will impact the desire to purchase new energy cars. As a result, among new Chinese new energy car vendors, second-tier ones such as Leap Motor and Hozon New Energy Automobile have performed better in sales than first-tier ones including NIO, Xpeng and Li Auto, since the former have launched inexpensive models. The second question is that whether popularization of power charging facilities will affect willingness to purchase new energy cars. According to DIGITIMES Research, the ratio of the number of power charging piles to that of existing new energy cars in China in 2021 was 6:1, higher than the 12:1 in Europe and the 16:1 in the US, but the infrastructure is still insufficient.