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China Adds Even More Electric-Car Incentives--Mostly For Local Brands


BYD e6 electric taxi in service in Shenzhen, China

BYD e6 electric taxi in service in Shenzhen, China

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Once again, China is trying to spur electric-car adoption with incentives, but this time, not every buyer will benefit from them.

In addition to promoting plug-in cars, the latest incentives program seems to be aimed at protecting domestic carmakers.

China will offer more tax breaks for electric carsReuters reports, but they will be limited mostly to local brands.

Chinese battery electric crossover: BYD e6 test drive, Los Angeles, May 2012

Chinese battery electric crossover: BYD e6 test drive, Los Angeles, May 2012

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Beginning this week, the government will stop levying sales tax on the sales of certain plug-in cars, comprising 17 models from 11 manufacturers.

The list, published on the website of China's Ministry of Industry and Information Technology (PDF), primarily includes cars from domestic manufacturers like BYD, as well as cars built under joint ventures with foreign companies like General Motors and Nissan.

It's also labeled a "first batch" (according to Google Translate, at least), indicating more models could be added at a later date.

The government has been trying to encourage the adoption of low-emission "new energy vehicles"--including battery-electric, plug-in hybrid, and hydrogen fuel-cell cars--for some time, to reduce rampant and extreme air pollution and decrease its oil imports.

Venucia E30 (Chinese version of Nissan Leaf electric car), Guangzhou Auto Show [photo: ChinaAutoWeb]

Venucia E30 (Chinese version of Nissan Leaf electric car), Guangzhou Auto Show [photo: ChinaAutoWeb]

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But more recently, incentive programs have emphasized the purchase of cars and trucks from domestic manufacturers.

President Xi Jinping has been urging government agencies to buy vehicles from local manufacturers such as BYD and SAIC, and cities have lowered protectionist barriers that previously prevented carmakers based in one city from doing much business in others.

The Chinese government will also extend electric-vehicle subsidies previously set to expire in 2015. Buyers are currently eligible for up to 60,000 yuan (about $9,800), although the amount may change when the program is reorganized.

Despite general buyer resistance to electric cars, some believe China will eventually become a major market.

Both BMW and Tesla Motors have stated the belief that China will become the largest market for their electric cars, although for that to happen the country will have to develop a robust charging infrastructure.

Tesla is tackling that problem head on, with a recent deal to build 400 electric-car charging stations in the country.

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