China Cuts EV Export Rebate as Exports Surge

China’s Ministry of Finance and State Taxation Administration announced a reduction in the value-added tax (VAT) rebate for exported electric vehicles. Starting April 1, 2027, the rebate for 67 categories of new energy vehicles will decrease from 13 percent to 9 percent. This marks the final cut in export support for China’s “new three” export industries, following similar reductions for lithium batteries and solar products, as foreign nations investigate Chinese overcapacity and subsidies.

• China will reduce its value-added tax (VAT) rebate for electric vehicle (EV) exports from 13% to 9%.
• The change will take effect on April 1, 2027, and applies to 67 vehicle categories.
• This is the last of China’s “new three” export industries (EVs, lithium batteries, solar products) to see reduced export support.
• Foreign investigators have found that China’s EV industry benefits from government subsidies and has built excess capacity.
• The announcement follows China brushing off foreign complaints about overcapacity as protectionism.