China has begun to gradually reduce the tax benefits that manufacturers and buyers of new energy vehicles have enjoyed for many years. The latest step was the introduction of a consumption tax on lithium batteries starting September 1, 2026. At the same time, sodium-ion and all-solid-state batteries, as well as fuel cells, will retain their exemption from this tax until the end of 2028.
The change seems small, but it affects almost the entire EV production chain. According to CarNewsChina, with an average price of a 314 Ah LFP cell at about 0.365 yuan per Wh, the additional tax burden for a car with a 60 kWh battery is approximately 438 yuan. After the rate increases to 4%, the amount will rise to about 876 yuan.
At the same time, China has already cut another important benefit. From January 1, 2026, the full exemption of new energy vehicles from purchase tax was replaced by a 50% discount. The actual rate is 5%, and the maximum tax reduction is limited to 15,000 yuan (about 193,000 rubles) per car.
The process does not end there. From January 1, 2027, the current benefits for vehicle and vessel tax for a number of new energy vehicles are expected to disappear. In particular, the 50% tax reduction for energy-efficient vehicles will be abolished, as well as the exemption for electric vehicles, plug-in hybrids, and fuel cell vehicles in their respective categories.