🧠 Food for thought

Implications, context, and why it matters.

January 2026 tax shift on China’s 2 million-plus monthly car market

• September BEV sales hit 826,000, up 28.5% year on year 1. From January 2026, EVs pay a 5% sales tax after an exemption, rising to 10% in 2028 1.
• On a 250,000 yuan EV, a 5% tax adds 12,500 yuan, about US$1,757. That wipes out about two-thirds of the 20,000 yuan trade-in subsidy that ends in December 1.
• Europe is winding down purchase incentives and tax breaks 2, so Q1 2026 in China will signal if momentum holds or a pullback follows the December rush.

Used EV valuation tools will be needed as trade-ins flood China’s secondary market

• The 20,000 yuan trade-in subsidy will push older EVs into the used market 1, but battery degradation drives resale value. Used BEVs post the lowest residuals among powertrains 2, while fast tech gains make older models feel outdated sooner 3.
• China’s EV lifespan sits near 10 years versus 18 for petrol cars, according to Cui Dongshu of the China Passenger Car Association (CPCA) 4. With 250 cars per 1,000 people 4 and rising rural ownership, demand for low-cost used EVs exists if buyers trust battery health.
• Dealers, lenders, plus marketplaces need battery diagnostics with certification platforms to price used EVs. In the US, rebate-eligible used EVs sell six times faster 5. Chinese firms that offer battery state of health (SOH) analytics (tools estimating a pack’s remaining capacity versus new) plus financing tied to battery condition can tap this segment.