Authorities have announced an adjustment to the vehicle and vessel tax policies for energy-efficient and new energy vehicles, set to take effect from the start of next year. The policy changes will see the removal of certain tax benefits currently in place.
The Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology have jointly issued an announcement specifying that, effective January 1, 2027, the policy of halving the vehicle and vessel tax for energy-efficient vehicles will be terminated. Concurrently, the policies exempting pure-electric commercial vehicles, plug-in hybrid (including range-extender) vehicles, and fuel cell commercial vehicles from the vehicle and vessel tax will also be cancelled.
The vehicle and vessel tax is a form of property tax levied annually on the owners or managers of vehicles and vessels. For passenger vehicles (those with a rated seating capacity of 9 persons or fewer), the tax amount is tiered based on engine displacement. For instance, vehicles with an engine displacement between 1.0 liters and 1.6 liters (inclusive) face a tax range of 300 to 540 yuan. Vehicles with displacement between 1.6 liters and 2.0 liters (inclusive) are subject to a tax range of 360 to 660 yuan.
For commercial vehicles, buses (with a rated seating capacity exceeding 9 persons) are taxed per vehicle, with amounts ranging from 480 to 1,440 yuan. Trucks are taxed based on their curb weight, with rates ranging from 16 to 120 yuan per ton. The specific applicable tax rates within these ranges are determined by the provincial, autonomous regional, and municipal governments.
It is reported that, to support the development of the new energy vehicle industry and promote energy conservation and emission reduction, China has implemented policies since 2012 that halved the vehicle and vessel tax for eligible energy-efficient vehicles and exempted eligible pure-electric commercial vehicles, plug-in hybrid (including range-extender) vehicles, and fuel cell commercial vehicles from this tax.
In recent years, China's automotive industry, particularly the new energy vehicle sector, has accelerated its development. In 2025, sales of new energy vehicles in China reached 16.49 million units, with their share of domestic new vehicle sales surpassing 50%.
Pure-electric commercial vehicles, plug-in hybrid (including range-extender) vehicles, fuel cell commercial vehicles, and energy-efficient vehicles, like other conventional fuel-powered vehicles, represent significant assets. Data indicates that in 2025, the average sales price for plug-in hybrid (including range-extender) passenger vehicles was 218,000 yuan, with some models selling for over one million yuan.
Reinstating the vehicle and vessel tax on these types of vehicles is conducive to promoting tax fairness and enhancing the role of taxation in income distribution.
According to the announcement, following the implementation of this policy adjustment, taxpayers who already own or newly acquire energy-efficient vehicles, pure-electric commercial vehicles, plug-in hybrid (including range-extender) vehicles, or fuel cell commercial vehicles will be required to pay the vehicle and vessel tax in accordance with regulations.
Furthermore, under the Vehicle and Vessel Tax Law of the People's Republic of China, pure-electric passenger vehicles and fuel cell passenger vehicles are not within the scope of the vehicle and vessel tax and are therefore not subject to it.
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