๐ Affected categories: Plug-in hybrids (including extended-range), electric commercial vehicles, and hydrogen fuel cell commercial vehicles must pay annual vehicle and vessel tax starting January 1, 2027.
๐ Exempted: Battery electric passenger cars and hydrogen fuel cell passenger cars have no engine displacement and remain untaxedโthe largest segment of China's EV market stays protected.
๐ฐ Rationale: PHEVs averaged 218,000 yuan in 2025 with some exceeding 1 million yuanโresuming tax collection promotes fairness and strengthens redistribution mechanisms.
๐ Market backdrop: China sold 16.49 million NEVs in 2025 (over 50% of new car sales), with retail penetration hitting 62.9% in May 2026.
โ ๏ธ Note: The original exemption dated to 2012; this shift reflects reduced government support as the market matures.
