What was the purchase tax policy for hybrid vehicles in 2021?
3 Answers
According to the relevant policies jointly issued by the Ministry of Finance and other ministries, from January 1, 2021 to December 31, 2022, new energy vehicles continue to enjoy the tax exemption for vehicle purchase tax. However, these exempted new energy vehicles must meet two conditions to qualify for this policy. Exemption from vehicle purchase tax: Currently, the new energy vehicles exempted from purchase tax refer to pure electric vehicles, plug-in hybrid (including range-extended) vehicles, and fuel cell vehicles. These types, such as some low-speed electric vehicles, do not fall under the category of new energy vehicles and cannot enjoy purchase tax reductions. Relevant policies: New energy vehicles exempted from purchase tax must be listed in the Ministry of Industry and Information Technology's exemption catalog, and they can only officially enjoy the tax exemption policy after the catalog is published. Note that the purchase date is the date indicated on the unified sales invoice (or valid certificate) of the motor vehicle.
Back in 2021 when I was car shopping, hybrid vehicles had two different treatments: plug-in hybrids could enjoy the benefit of full purchase tax exemption, like BYD DM models, saving a whole 10% of the car price upfront; but regular hybrids like Toyota's Dual Hybrid still had to pay taxes as usual. This policy continued the 2020 new energy vehicle incentives, clearly showing the government's push for plug-in hybrid technology. I ended up choosing a tax-exempt plug-in hybrid, saving 15,000 yuan just on purchase tax, which I used to upgrade the infotainment system. One thing to note is to check if the model is on the tax-exempt list, as some mild hybrids aren't included.
The 2021 purchase tax policy for hybrid vehicles continued the differentiated treatment of the previous two years: plug-in hybrids remained exempt from the 10% purchase tax, while conventional hybrids maintained the original tax rate. When I was working on my car purchase budget, I carefully calculated that the tax exemption policy made the final price of plug-in hybrids even lower than that of comparable fuel-powered cars, which is a direct reflection of the policy benefits. However, it's important to distinguish between plug-in hybrids and range-extended electric vehicles. Models like the Li ONE, which is a range-extended electric vehicle, also enjoy tax exemption, but conventional hybrids like Honda's i-MMD have to pay the full tax. The policy direction is clear—encouraging new energy vehicles that can be charged externally.
