The China Auto Dealers Association forecast Wednesday that the new car market will remain flat in 2023 after government subsidies for electrified vehicles and tax incentives for fuel-powered vehicles end at the end of December.
In 2010, Beijing began subsidizing private purchases of fully electric and plug-in hybrid vehicles. In 2022, EVs will be eligible for subsidies ranging from 9,100 yuan ($1,321) to 12,600 yuan, and plug-in hybrids will be eligible for a uniform subsidy of 4,800 yuan. The subsidy system was abolished on December 31.
On June 1, the Chinese government halved the purchase tax to 5% for fuel-powered vehicles with an engine size of 2.0 liters or less and a price of 300,000 yuan ($43,541) or less. That tax cut also he expired on December 31st.
Retail sales of new sedans, crossovers, SUVs and utility vehicles across the industry rose 15%,12 as customers rush to buy new vehicles before subsidies and tax incentives expire, according to CADA. It reached 2.43 million units in the month. .
However, through 2022, new car sales will only grow by 1.8% year-on-year to 20.7 million units, the trade group added.