An aerial drone photo taken on April 10, 2026 shows vehicles to be exported at a ro-ro dock of Tianjin Port in north China's Tianjin.  (Photo by Du Penghui/Xinhua)

China announced on Monday that it will cut the value-added tax (VAT) export rebate rate for new energy vehicles (NEVs) to 9 percent from 13 percent starting April 1, 2027.

VAT export rebates for e-cigarette devices and related products will be scrapped from the same date, according to a statement jointly issued by the Ministry of Finance and the State Taxation Administration.

Export consumption tax policies for products subject to the tax will remain unchanged, with existing tax refund or exemption arrangements continuing to apply, the statement said.

The adjustment comes as China has continued to optimize export tax rebate policies.

The country scrapped VAT export rebates for photovoltaic products from April 1, 2026, while cutting the rebate rate for battery products to 6 percent from 9 percent on the same date. The rebates for battery products will be eliminated from Jan. 1, 2027.

China is the world's largest market for NEVs, a category that includes battery electric and plug-in hybrid vehicles. The sector has expanded rapidly in recent years, with automakers increasingly looking to overseas markets for growth.

Luo Zhiheng, chief economist at Yuekai Securities, told business news network Yicai that cutting export tax rebates can, to some extent, reduce rat race competition and encourage companies to shift from low-price competition to technology and brand-based competition.

"China's NEVs are highly competitive internationally. Against the backdrop of tight global supplies of traditional energy, NEVs have met the needs of residents in Europe and the United States. Even with a partial rebate cut, they can retain sufficient competitiveness," Luo said. "Objectively, this also plays a positive role in stabilizing the macro tax burden and can better support the development of domestic demand."

During the January-September period, China's auto exports totaled 8.205 million units, including over 4 million NEVs, more than double the level a year earlier, according to the latest data.

"Despite a complex and severe external environment, exports have continued to grow rapidly, demonstrating strong resilience, while domestic new growth drivers are being steadily unleashed and the share of NEV sales is rising steadily," said Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers.

Looking ahead to the fourth quarter, the industry is expected to maintain steady operation, Chen said.