BEIJING — China has announced a raft of new steps to spur consumer demand for cars, saying it would consider extending a tax break for electric vehicles and outlining plans to build more charging stations and encourage lower charging fees.
The plans were announced by the Ministry of Commerce on Thursday as part of a joint statement with 16 other departments. More detailed policies on product safety and the establishment of additional charging infrastructure will be released in due course.
The world’s largest car market has been hit hard in recent months by stringent lockdowns in Shanghai and other parts of the country to curb the spread of the Omicron coronavirus variant.
As part of the new efforts, authorities last month halved the auto purchase tax to 5 percent for cars priced under 300,000 yuan ($45,000) with a 2.0-liter engine or smaller.
Buyers of certain electrified vehicles have not had to pay the purchase tax since 2014. A plan to reinstate it next year may now be scrapped, the ministry said, confirming a stance first flagged last month by the country’s cabinet.
The halving of the tax has helped the market rebound with June passenger car sales jumping 22 percent from a year earlier to 1.9 million units, according to preliminary data from an auto association.
EV sales soared 130 percent to 546,000 units last month, accounting for nearly 30 percent of total vehicle sales.
Sales for market leader BYD more than tripled to 134,000.
The commerce ministry statement did not make a mention of any extension of subsidies for what China calls new energy vehicles – a program that has been credited with supercharging the sector’s growth.
The China Passenger Car Association, which releases June data on Friday, has forecast sales of new-energy vehicles will reach 5.5 million this year.
Reuters reported in May that authorities were in talks with automakers about extending the program.
The ministry also said it would encourage the replacement of older vehicles, increase credit support for car purchases and remove barriers to selling second-hand cars across different provinces.
Encouraging car sales in China’s vast rural areas was another area officials said would be examined.
Bloomberg contributed to this report