Li Auto Inc LI and XPeng Inc XPEV shares are trading higher Wednesday after China announced an extension of its new energy vehicle purchase tax exemption.
What Happened: China introduced a new 520 billion yuan ($72.35 billion) package aimed at increasing auto demand in the country, per Reuters.
New energy vehicles (NEVs), which include battery electric vehicles, plug-in petrol-electric hybrids and hydrogen fuel-cell vehicles, purchased in 2024 and 2025 will be eligible for a purchase tax exemption of up to 30,000 yuan per vehicle. The exemptions will extend into 2026 and 2027, but the total amounts will be cut in half during those years.
The report indicates that the four year tax exemption extension came in above market expectations, which has fueled a rally in several Chinese EV stocks, including Li Auto, XPeng and Nio.
Li Auto and XPeng both design, develop, manufacture and market EVs in China.
See Also: Tesla Charges Ahead In Europe As May Registrations Surge Over 2000% While Ford Falters
LI, XPEV Price Action: At time of publication, Li was up 2.85% at $34.70 and XPeng was up 2.01% at $11.10, according to Benzinga Pro.
Photo: Paul Brennan from Pixabay.
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