On December 11, the Ministry of Industry and Information Technology, the Ministry of Finance and the State Administration of Taxation (hereinafter referred to as the three departments) jointly issued the Announcement on Adjusting the Technical Requirements for New Energy Vehicle Products with Vehicle Purchase Tax Exemption and Exemption (Announcement No. 32, 2023, issued by the Ministry of Industry and Information Technology, the Ministry of Finance and the State Administration of Taxation, hereinafter referred to as the Announcement on Technical Requirements), Clarified the technical requirements for new energy vehicle products enjoying vehicle purchase tax exemption. In order to better understand and implement the Technical Requirements Announcement, the responsible comrades of the First Equipment Industry Division of the Ministry of Industry and Information Technology interpreted the Technical Requirements Announcement.
Q: What is the background of the Technical Requirements Bulletin?
Answer: China has implemented the vehicle purchase tax exemption policy for new energy vehicles since September 2014, and it will be extended three times in 2017, 2021 and 2022 respectively. The current policy will expire at the end of 2023. This policy, in coordination with preferential policies such as financial subsidies for the promotion and application of new energy vehicles, has played a vital role in rapidly cultivating the new energy vehicle consumption market and driving the industrial development. At present, there is still a gap between the cost of new energy vehicles and that of traditional fuel vehicles. The purchase subsidy policy has been withdrawn by the end of 2022. It is necessary to continue to implement the vehicle purchase tax reduction policy to stabilize and expand the consumption of new energy vehicles.
Since 2017, the technical requirements of the vehicle purchase tax exemption policy have not been adjusted, except for the relevant technical parameters of plug-in hybrid vehicles (including incremental programs) in 2021 due to the update of test standards. In recent years, with the rapid expansion of production and marketing scale of new energy vehicles, the energy density of power battery system, driving range of pure electric passenger vehicles, energy consumption per unit load of commercial vehicles and other technical levels have significantly improved. In order to adapt to the actual industrial development, guide enterprises to continue to improve product quality and performance, and promote high-quality industrial development, it is urgent to adjust and optimize technical requirements.
Q: What is the main work carried out during the preparation of the Technical Requirements Bulletin?
Answer: In order to ensure that the relevant requirements of the Technical Requirements Bulletin are scientific and reasonable, we have mainly carried out the following work: First, in-depth investigation and research. Conduct a comprehensive survey of the technical development of new energy vehicles, sort out the national standards, test methods, technical level status, analyze the future development trend, and study and propose technical indicators and threshold conditions. The second is to fully solicit opinions. Several symposiums have been held to listen to the opinions of enterprises, industry experts and government departments, and to fully communicate the technical conditions, implementation requirements and other contents. The third is the research of special conferences. The three departments have held meetings for many times to conduct special research on relevant issues and opinions, and strive to make the policy requirements scientific and reasonable. In addition, we also completed the review of fair competition of policies and the evaluation of consistency with macro policies.
Q: What is modified in the Technical Requirements Bulletin?
Answer: First, the requirements of existing technical indicators have been appropriately improved. In comprehensive consideration of technical progress and future development, the Technical Requirements Bulletin has improved the requirements of existing technical indicators such as vehicle energy consumption, driving range, power battery system energy density, etc. In terms of fuel cell vehicles, in combination with the progress of fuel cell vehicle demonstration work, the index requirements of fuel cell vehicles such as pure hydrogen driving range, system rated power, the ratio of system rated power to the rated power of the drive motor were optimized, and the index requirements such as fuel cell starting temperature, fuel cell stack rated power density, and system rated power density were supplemented. Second, new requirements for technical indicators of low-temperature mileage attenuation. In order to guide enterprises in the industry to continuously improve the low-temperature resistance of new energy vehicle products, the Technical Requirements Announcement proposes that the low-temperature mileage decay rate of pure electric passenger vehicles and N1 pure electric trucks tested in accordance with the "Appendix A" of GB/T 18386.1 Electric Vehicle Energy Consumption and Driving Range Test Methods Part 1: Light Vehicles shall not exceed 35%, The energy density of battery system can be extended to 95Wh/kg, and the driving range of pure electric passenger vehicles can be extended to 120km. Third, the relevant requirements for the vehicle model in the power change mode were clarified. The power change mode has certain advantages in reducing car purchase costs, eliminating mileage anxiety, and improving safety level. In order to support the innovation and development of the power exchange mode, in combination with the development of the industry and the implementation of the standards, the Technical Requirements Announcement clearly states that the relevant models need to meet the standards of GB/T 40032 Safety Requirements for Electric Vehicle Power Exchange. At the same time, in order to ensure the true power exchange and use, the applicant is required to provide proof materials to ensure the power exchange service.
Q: What problems should industrial enterprises pay attention to when implementing the Technical Requirements Bulletin?
Answer: In order to ensure the smooth transition of the implementation of the policy, industry enterprises are especially reminded to pay attention to the time nodes and implementation requirements to avoid the impact on product production and terminal sales.
（1） Pay attention to the time node requirements. From January 1, 2024, the models newly applied for entry into the Catalogue of New Energy Vehicle Models with Vehicle Purchase Tax Exemption or Exemption (hereinafter referred to as the Catalogue of Tax Exemption or Exemption) shall meet the requirements of the Technical Requirements Announcement. Models that have entered the Catalogue of New Energy Vehicle Models Exempted from Vehicle Purchase Tax before December 31, 2023 and are still valid will be automatically transferred to the Catalogue of Tax Reduction and Exemption, and will still enjoy the policy of vehicle purchase tax reduction and exemption from January 1, 2024 to May 31, 2024. From June 1, 2024, vehicle models that do not comply with the Technical Requirements Announcement will be withdrawn from the Catalogue of Tax Reduction and Exemption. Relevant work on compliance of policy switching shall be completed for relevant models during the transition period.
（2） Timely supplement the historical vehicle model materials. The historical vehicle models transferred to the Catalogue of Tax Exemption and Exemption shall be timely supplemented with "tax exemption" and "power change mode" signs. The vehicle models with power change mode shall also be provided with third-party test reports that meet the standards of GB/T 40032 Safety Requirements for Electric Vehicle Power Change, as well as proof materials such as power change service guarantee. The tax department shall handle the tax exemption and reduction procedures according to the relevant signs.
Q: What is the expected impact of the Technical Requirements Announcement on the development of the industry?
Answer: The Technical Requirements Announcement keeps the main framework basically stable. The adjusted indicators fully refer to the implemented policies of new energy vehicle purchase subsidies, double credits, fuel cell vehicle demonstration applications, etc., while reserving a transition period. Industry enterprises have full expectations of the new policy requirements.
From the perspective of industry impact, there are mainly four aspects: First, it is conducive to stabilizing the automobile market. There is still a gap between the cost of new energy vehicles and that of traditional vehicles. With the support of tax reduction and exemption policies at the consumer end, the technical requirements are basically stable, which helps guide enterprise expectations, stabilize and expand the consumption of new energy vehicles. According to the situation in the first half of 2023, more than 90% of models can meet the new requirements. Second, it is conducive to guiding technological progress. The Technical Requirements Announcement comprehensively considers the technical progress, standard update and other conditions, moderately improves the requirements for mature technologies that have been widely used, and gives preferential support to new technologies and new models such as low-temperature attenuation and power exchange, which is conducive to improving product technology and promoting model innovation. Third, it is conducive to guiding energy-saving consumption. In recent years, the rapid growth of the average curb weight of vehicles has brought great pressure to achieve the industry energy consumption target. The Announcement of Technical Requirements moderately tightened the requirements for power consumption and fuel consumption (plug-in hybrid) to further guide energy saving consumption. Fourth, it is conducive to guiding enterprises to ensure product safety. The Announcement of Technical Requirements defines the requirements related to safety management such as product quality assurance and platform construction, and timely controls the models with safety accidents, which is conducive to guiding enterprises to ensure the safety of new energy vehicles.
