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In Depth: EV Boom Strains China’s Auto Tax System

By An Limin and Kelsey Cheng
2026年07月03日 17:26
Beijing wants to encourage new-energy vehicle adoption, but the transition is starving road budgets and distorting government incentives, driving demand for auto tax reform

China hit its 2035 new-energy vehicle (NEV) target a full decade early. Now its auto tax system, built around engine displacement and fuel consumption, is struggling to catch up, threatening road maintenance funding, distorting local government incentives and forcing policymakers into a major tax overhaul.

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