BEIJING, July 7 (Reuters) - China on Thursday announced a
raft of new steps to spur consumer demand for cars, saying it
would consider extending a tax break for electric vehicles and
outlining plans to build more charging stations and encourage
lower charging fees.
The plans, announced by the Ministry of Commerce as part of
a joint statement with 16 other departments, boosted shares of
Chinese automakers, with Geely surging 6% and Great
Wall Motor rising 4%.
The world's largest car market has been hit hard in recent
months by stringent lockdowns in Shanghai and other parts of the
country to curb the spread of the Omicron coronavirus variant.
As part of the new efforts, authorities last month halved
the auto purchase tax to 5% for cars priced under 300,000 yuan
($45,000) with 2.0-litre or smaller engines.
Buyers of certain fully electric and partly electric
vehicles have not had to pay the purchase tax since 2014. A plan
to reinstate it next year may now be scrapped, the ministry
said, confirming a stance first flagged last month by the
The halving of the tax has helped the market rebound with
June passenger car sales jumping 22% from a year earlier to 1.9
million units, according to preliminary data from an auto
EV sales soared 130% to 546,000 units last month, accounting
for nearly 30% of total vehicle sales. Sales for market leader
BYD Co Ltd more than tripled to 134,000.
The commerce ministry statement did not make a mention of
any extension of subsidies for what China calls new energy
vehicles - a programme that has been credited with supercharging
the sector's growth.
Reuters reported in May that authorities were in talks with
automakers about extending the programme.
The ministry also said it would encourage the replacement of
older vehicles, increase credit support for car purchases and
remove barriers to selling second-hand cars across different
(Reporting by Brenda Goh in Shanghai and Sophie Yu in Beijing;
Additional reporting by Miyoung Kim in Singapore; Editing by