SHANGHAI - China will exempt electric cars and other types of "new energy" vehicles from purchase tax, the government said, as it seeks to reduce pollution and conserve resources.
The State Council, or cabinet, said that buyers of new energy vehicles -- fully electric, hybrid and fuel cell cars -- would not have to pay the levy from September to the end of 2017, according to a statement.
The tax is 10 per cent of the net value of the vehicle, according to state media.
"For achieving industrial development and environmental protection, this is a win-win," the State Council said in the statement Wednesday.
The exemption applies to imported vehicles as well as domestically produced ones, the statement said, adding the government would compile a catalogue of eligible models.
China has sought to increase ownership of electric and hybrid vehicles to ease chronic pollution and reduce reliance on oil imports, but high prices, lack of infrastructure and consumer reluctance have been obstacles.