Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), has called for new tax and energy-consumption policies to address the trend of new energy vehicles (NEVs) in China becoming larger and heavier. Speaking at a recent automotive data briefing, Cui highlighted the lack of current tax constraints on NEV weight and power, and suggested reforms to guide the industry toward more efficient vehicles.
Current Tax System and NEV Growth
Cui Dongshu noted that China’s existing tax system does not differentiate NEVs based on their weight or power output. This is in contrast to traditional combustion-engine vehicles, which have historically faced displacement-based taxes. For example, models with engine displacements above 2.5 liters are subject to a 25% levy, which previously discouraged automakers from developing larger SUVs.
Without similar constraints for NEVs, manufacturers have increasingly produced larger and more powerful electric vehicles. Cui described this trend as problematic and called for policy changes to address it.
Proposed Measures to Guide NEV Development
Cui suggested that China should implement a standard system for economy vehicles to encourage purchases by ordinary consumers. He also recommended using tax and energy-consumption management measures to limit the growth in vehicle size and power.
Last month, Cui proposed introducing a statutory road-usage tax based on mileage and vehicle weight. This measure aims to address the structural imbalance caused by declining fuel tax revenue as NEV adoption rises.
Industry Trends and Challenges
NEVs typically weigh more than their combustion-engine counterparts due to the large power batteries required. According to state broadcaster CCTV, the average curb weight of new passenger cars in China reached 1,704 kilograms (~3,758 lbs) in 2024, nearly 400 kilograms (~882 lbs) more than in 2012.
To achieve driving ranges of 800 km (~497 miles) or even 1,000 km (~621 miles), vehicles are often equipped with battery packs weighing 700 to 800 kilograms (~1,543 to 1,764 lbs), as cited by an industry expert.
William Li, founder and CEO of Nio Inc, commented last month that reducing NEV weight is a complex and challenging process. He noted that in the final stages of vehicle development, the cost of reducing each kilogram is about $147 (~AUD 212).
NEV Market Penetration
China’s NEV retail penetration rate reached 62.8% in June, an increase of 9.5 percentage points year on year, according to CPCA data. This marks a near-record high for the sector as electric vehicles continue to gain market share.
Why this matters
The rapid upsizing of NEVs in China has implications for resource use, infrastructure, and the overall efficiency of the automotive sector. Without targeted policy measures, the trend toward heavier and more powerful vehicles may continue unchecked.
Cui’s proposals highlight the need for regulatory frameworks that balance innovation with sustainability, ensuring that the benefits of NEV adoption are not offset by increased resource consumption and road wear.
What this means for buyers
Buyers should be aware that discussions around tax and regulatory changes could influence the future cost and design of NEVs in China. Those considering a new vehicle may want to monitor policy developments, as future incentives or standards could affect the affordability and efficiency of different models.
Key Specs
- Average Curb Weight (2024): 1,704 kg (~3,758 lbs)
- Increase Since 2012: Nearly 400 kg (~882 lbs)
- Typical Battery Pack Weight: 700–800 kg (~1,543–1,764 lbs)
- NEV Retail Penetration Rate (June 2026): 62.8%
- Cost to Reduce 1 kg in Final Development: $147 (~AUD 212)
