In June, pure electric vehicles accounted for 68% of new energy vehicle retail sales. What is the impact of the new vehicle and vessel tax policy?

After the retail penetration rate exceeds 60%, new energy vehicles have reached a critical turning point of differentiation.

On July 8, the China Passenger Car Association (CPCA) released data on the national passenger vehicle market. In June, the national passenger vehicle market retailed 1.602 million units, a year-on-year decrease of 23.2% and a month-on-month increase of 6.1%; the cumulative retail volume since the beginning of this year reached 8.701 million units, a year-on-year decrease of 20.2%.

The institution pointed out that in June, the total domestic passenger vehicle market was under pressure with significant structural differentiation. The "sluggish fuel vehicles and booming battery electric vehicles" became the biggest highlight. The core reason is that the "collapse of fuel vehicle sales" pushed the retail penetration rate of new energy vehicles to 62.8%, and the electrification substitution speed exceeded expectations.

New Vehicle and Vessel Tax Policy Introduced: What Impact Will It Bring

By segment, the retail volume of new energy passenger vehicles in that month reached 1.007 million units, a year-on-year decrease of 9.4% and a month-on-month increase of 6.0%. Among them, battery electric vehicles (BEVs) retailed 685,000 units, accounting for about 68% of the total; plug-in hybrid electric vehicles (PHEVs) and range-extended electric vehicles (REEVs) together took 32% of the market share, with corresponding retail volumes of 241,000 units and 82,000 units respectively.

Compared with the same period last year, the retail volume of BEVs in June increased by 3.6%, while PHEVs and REEVs declined to varying degrees, with corresponding change rates of -27.3% and -31.9% respectively; compared with May, the retail volume of BEVs increased by 7.4%, PHEVs increased by 5.4%, and REEVs decreased by 3.8%.

Industry insiders believe that driven by policies, the growth gap between BEVs, PHEVs and REEVs will continue to widen in the later period.

Earlier this July, the Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology issued an announcement, clarifying that starting from January 1, 2027, the policy of halving the vehicle and vessel tax for energy-saving vehicles will be canceled, and the policy of exempting vehicle and vessel tax for pure electric commercial vehicles, plug-in (including range-extended) hybrid electric vehicles, and fuel cell commercial vehicles will also be canceled.

It is reported that the vehicle and vessel tax is a kind of property tax, levied annually on the owners or managers of vehicles and vessels. For passenger vehicles (with a approved seating capacity of 9 people or less), the tax amount is set in different grades according to the displacement. For example, for vehicles with a displacement of more than 1.0 liter to 1.6 liters (inclusive), the tax range is from 300 yuan to 540 yuan; for vehicles with a displacement of more than 1.6 liters to 2.0 liters (inclusive), the tax range is from 360 yuan to 660 yuan.

This tax reduction and exemption policy was launched in 2012, aiming to encourage consumers to purchase new energy vehicles and energy-saving vehicles, and promote the development of the automotive industry.

Regarding the reason for resuming the collection of vehicle and vessel tax, relevant responsible persons mentioned in a press interview that the average sales price of plug-in (including range-extended) hybrid passenger vehicles in 2025 is 218,000 yuan, and the sales price of some models exceeds one million yuan. "Resuming the collection of vehicle and vessel tax for the above types of vehicles is conducive to promoting tax fairness and enhancing the regulatory role of taxation in income distribution."

Times Finance found through interviews that many consumers believe that the new policy has limited impact on the total vehicle price.

"I don't think it will have much impact. People who want to buy new energy vehicles won't care too much about the extra few hundred yuan in taxes." Wang Di (pseudonym) is a post-2000s generation, and most of his friends are fans of new energy vehicles. However, considering some long-distance travel scenarios, they prefer hybrid models, "For example, when I drive back to my hometown, I can run on fuel."

An insider working at a new energy vehicle company also holds a similar view. He told Times Finance that currently, the engine displacement of PHEVs or REEVs generally does not exceed 2L, and the vehicle and vessel tax amount ranges from 360 yuan to 660 yuan. "Collecting this small amount of money a year will not have a decisive impact on users' decision-making."

The Dominant Position of Battery Electric Vehicles Is Becoming Increasingly Obvious

Hua Tai Securities listed a set of estimated data: the mainstream displacement of current plug-in hybrid/range-extended passenger vehicles falls into the 1.0 to 1.6L range, with a tax range of 300 yuan to 540 yuan (420 yuan in Beijing, 300 yuan in Shanghai and Guangdong), accounting for 0.14% to 0.25% of the 2025 average price of 218,000 yuan for plug-in hybrid passenger vehicles.

In the view of the above-mentioned insider of the new energy vehicle company, the vehicle and vessel tax is more of a signal. Combined with the "policy phase-out" in some regions, it is an inevitable trend that the policy dividends for domestic hybrid models will decrease. The final form may be the same as that of pure fuel vehicles, except that the license plate is green, "the policy dividend advantage of pure electric models will become more and more obvious."

This is a consensus in the industry.

About half a month ago, Li Bin, founder, chairman and CEO of NIO, publicly stated that by 2030, the penetration rate of new energy vehicles in China's new car market will exceed 90%, of which the proportion of battery electric vehicles in the new energy vehicle market will exceed 90%.

In Li Bin's latest prediction, the proportion of battery electric vehicles in the new energy market has increased by 10 percentage points.

An industry insider who has long tracked the automotive industry told Times Finance that the domestic market will still maintain a diversified structure in the future, but the sales volume of plug-in hybrid and range-extended vehicles will become lower and lower, and the dominant position of pure electric products will become more and more obvious. "They (PHEVs/REEVs) are transitional products in essence."

But this does not mean that automakers will give up the R&D and production capacity layout of PHEVs and REEVs.

In recent years, automakers have focused on exploring overseas markets for incremental growth, and plug-in hybrid technology is a very important competitive asset. Times Finance noticed that since January 2026, mainstream independent brands such as Geely, Chery, and Changan have successively released brand-new hybrid technology solutions.

According to data from the CPCA, from January to May this year, China's cumulative export of new energy vehicles reached 1.89 million units, with a year-on-year growth rate of 61%. Among them, 463,000 units were exported in May, a year-on-year increase of 59%.

By product type, among China's automobile export products in May, pure electric products accounted for 29%, a year-on-year decrease of 5 percentage points; plug-in hybrid products accounted for 17%, a year-on-year increase of 4 percentage points.

This article is from the WeChat official account "Times Finance APP" (ID: tf-app), written by Wu Dian and Xinlin Lin, and published with authorization from 36Kr.