On September 11, it was reported that 2025 marks the final year for China to waive the vehicle purchase tax on new energy vehicles. Starting from 2026, the tax will be reinstated, albeit with some preferential policies still in place. According to the 'Announcement on the Continuation and Optimization of Vehicle Purchase Tax Reduction and Exemption Policies for New Energy Vehicles' issued by the Ministry of Finance and other relevant departments in 2023, new energy vehicles bought between January 1, 2026, and December 31, 2027, will enjoy a 50% reduction in vehicle purchase tax. However, the tax reduction for each new energy passenger vehicle is capped at 15,000 yuan. In essence, individuals and entities purchasing new energy vehicles during 2026 and 2027 will be liable to pay vehicle purchase tax, albeit at a reduced rate of 50%. Given that the current vehicle purchase tax rate stands at 10%, this translates to an effective tax rate of 5% post-reduction. To prevent high-end luxury new energy vehicles from unduly benefiting from preferential policies, the 'Announcement' has established an upper limit on the vehicle purchase tax for new energy vehicles for the upcoming two years, with the tax reduction per vehicle not exceeding 15,000 yuan.