(Yicai Global) April 24 -- China will specify its 2024 passenger car tax policy as soon as possible to promote consumption, according to a vice minister.

The Ministry of Industry and Information Technology will advance the study of post-2023 car purchase tax cut and exemption policies, the ministry wrote on its website, citing Xin Guobin who was talking during a symposium held in Shanghai April 19-21.

China was heavily subsidizing car buying till 2022 amid a market downturn and for new energy vehicles, the tax exemption was even extended till Dec. 31, 2023. Industry insiders have proposed that the 2022 policy of halved purchase tax for certain energy-efficient and more affordable gas-powered cars should be extended too.

Despite the robust support, sustainable growth is not certain. In the first quarter of this year, the NEV market continued to expand even though the business environment is changing and becoming more fragmented as the industrial layout could be further optimized and smart car makers are intensifying rivalry, according to symposium participants.

As several NEV brands joined car price wars last month, the automotive sector is facing enlarged pressures, according to the China Association of Automobile Manufacturers. Regional governments of all levels should continue to introduce policies to promote auto consumption to further stimulate market vitality, it suggested.

Going forward, part of the MIIT's focus will still lie on electric cars. The ministry will formulate supportive policies to accelerate the construction of charging and battery swap facilities, Xin said, adding that it will also promote the use of NEVs in the public sphere.

In the future, the ministry needs to introduce effective policies to stabilize and expand auto consumption while promoting a higher level of NEV industry development, Xin said. Different ministries' efforts in the area will be coordinated via a new mechanism in a concerted manner. Innovation will be enhanced to achieve technical breakthroughs regarding automotive chips, solid-state batteries, operating systems, high-precision sensors, and others.

The ministry will also deepen international cooperation, per Xin. It will accelerate the alignment of regulations and the unification of certification standards while building a market-oriented, rule-based, and international business environment, he added.

Editor: Emmi Laine, Xiao Yi