China to Reintroduce NEV Purchase Tax in 2026, Signaling Market Normalization and Efficiency Push
China will apply a 5% purchase tax to most NEVs from 2026 and tighten PHEV technical requirements, ending a decade of full exemptions while maintaining preferential treatment versus ICE vehicles. The policy is likely to pull demand into late 2025, pressure OEM margins through tax-offset offers and pricing actions, and intersect with rising export dependence amid evolving overseas rules.