(Yicai Global) June 21 -- China has extended the purchase tax breaks on new energy vehicles through 2027 in a move expected to save buyers about CNY520 billion (USD78 billion) over four years, according to the finance ministry.

NEVs bought next year and in 2025 will be exempted from purchase tax by as much as CNY30,000 (USD4,200), which will be halved to no more than CNY15,000 in 2026 and 2027, Vice Finance Minister Xu Hongcai said at a press conference today.

China first introduced the policy, which surpassed CNY200 billion last year and will likely top CNY115 billion this year, in September 2014.

Its extension aims to maintain support for the development of the NEV industry, consolidate and expand the development advantages of NEVs, bring incentives into full play, and avoid high-end luxury cars over-occupying resources by setting an upper limit for tax deductions, Xu told Yicai Global.

China will support the commercial application of level three and four autonomous driving technologies and launch pilot projects for intelligent connected vehicle access and road testing, Xin Guobin, vice minister of industry and information technology, said at the same briefing.

In the first five months of the year, production and sales of NEVs reached 3 million and 2.9 million units, up 45 percent and 47 percent, respectively, from a year earlier, Xin added, noting that NEV sales accounted for 28 percent of the total, continuing a positive development trend.

Editor: Futura Costaglione